Swiss Re Structures and Places $350 Million Florida Catastrophe Bond

Swiss Re Capital Markets successfully structured and placed the issuance of $350 million of insurance-linked securities (ILS) by Frontline Re Ltd. on behalf of Frontline Insurance ("Frontline"). The transaction is Frontline's debut catastrophe bond and covers named storms in Alabama, Florida, North Carolina, and South Carolina.

Swiss Re Capital Markets underwrote the transaction via two classes of principal at-risk variable rate notes issued by Frontline Re Ltd., a Bermuda exempted company licensed and registered as a special purpose insurer under the Bermuda Insurance Act 1978 and related regulations, each as amended.

The $350 million Frontline Re Ltd. transaction represents the largest cat bond of a Florida-based (nongovernment entity) insurance company. The $250 million Class A notes and $100 million Class B notes have a 4-year risk period from July 1, 2018, and provide protection against named storms. The transaction features an event adjusted attachment level, which for the first time in the cat bond market is based on the event size rank of a named storm within an annual risk period.

Jean-Louis Monnier, co-head of ILS at Swiss Re Capital Markets, said, "Swiss Re is pleased to provide support to Frontline on its debut catastrophe bond issuance. The transaction was well received by investors, and is the largest for a Florida insurer since 2014. The innovative cat bond combines structural mechanics of the Florida Hurricane Catastrophe Fund ("FHCF") as well as features of Frontline's private reinsurance coverage and therefore seamlessly integrates with Frontline's reinsurance program."