RMS Provides Risk Analysis for Securitization of Hurricane, Earthquake Risk by the Hartford FSG

Risk Management Solutions (RMS), a provider of products and services for the management of catastrophe risk, announced that it provided the risk analysis for a securitization of U.S. hurricane and earthquake risk by The Hartford Financial Services Group Inc. Issued by Foundation Re Ltd., a Cayman Islands reinsurance company, the securities fund $247.5 million of multi-year, collateralized catastrophe reinsurance coverage for The Hartford.

The new reinsurance consists of two separate coverages. The first coverage provides $180 million of reinsurance for losses from U.S. Northeast and Gulf Coast hurricane events. The second provides $67.5 million of reinsurance for losses resulting from U.S. earthquakes or hurricanes in the year following a major U.S. earthquake or hurricane event.

The securities incorporate a customized index trigger based on loss estimates for hurricane and earthquake events reported by Property Claim Services (PCS). RMS used its hurricane and earthquake Industry Exposure Database (IED) to model the potential PCS loss estimates for events covered under the securities. The IED is a representation of insured values by peril and by line of business for insured property exposure in the United States.