Hong Kong’s Insurance coverage Authority (IA) has welcomed the latest issuance of the most recent and sixth disaster bond underneath its insurance-linked securities (ILS) regulatory regime, saying the US $35 million Silk Road Re Limited cat bond sponsored by Taiping Re reinforces its dedication to the sector.
As we’ve been reporting, Taiping Re secured a three-year supply of fully-collateralized retrocessional reinsurance by means of its debut Silk Highway Re disaster bond.
The Silk Highway Re cat bond notes present Taiping Re with safety for losses from each Chinese language earthquake danger and US named storm dangers, whereas the construction utilises each parametric and trade loss triggers.
Because of this, the Silk Highway Re disaster bond is the first multi-peril and territory issuance to come out of Hong Kong and also the first cat bond issued under the Hong Kong ILS regulatory regime to feature multiple triggers.
An Insurance coverage Authority of Hong Kong spokesperson said, “That is the sixth insurance-linked securities (ILS) issued in Hong Kong and the primary locally-issued ILS tied to a number of perils and triggers.
“It reinforces our dedication to forging a holistic ecosystem that embraces knowledge harvesting, disaster modelling, product design, investor training and expertise nurturing in addition to to narrowing the safety hole brought on by the rising frequency and depth of pure catastrophes.”
The Silk Highway Re disaster bond is the fourth to be issued utilizing a Hong Kong regulated particular function reinsurance car, the opposite two issuances having been World Financial institution IBRD cat bonds that noticed their notes listed on the Hong Kong Alternate.
Because of this, the six ILS issuances which have now taken place for the reason that introduction of a bespoke regulatory regime
and a pilot grant scheme for insurance-linked securities in 2021, have featured a complete sum of US $748 million of cat bond notes.
Some US $247.5 million of that complete was issued utilizing Hong Kong domiciled and controlled SPRV buildings.
These had been China Re’s $30 million Greater Bay Re Ltd. (Series 2021-1) cat bond, Peak Re’s $150 million Black Kite Re Limited (Series 2022-1) which was the primary 144A cat bond issued out of Hong Kong, and PICC Property and Casualty Firm Restricted’s $32.5 million Great Wall Re Limited deal, in addition to the brand new $35 million Silk Road Re Limited for Taiping Re.
Hong Kong has additionally seen the notes from the World financial institution facilitated $350 million IBRD – Chile 2023 cat bond listed on its inventory alternate in 2023, and likewise the notes from the $150 million IBRD CAR Jamaica 2024 cat bond listed earlier this 12 months.
