28 January 2019ILS

Aetna enters $200m ILS deal with recently formed Cayman vehicle Vitality Re X

Aetna, a provider of healthcare insurance and subsidiary of CVS Health, has entered into a four-year reinsurance deal with a newly formed Cayman Islands special purpose insurance vehicle, Vitality Re X.

The deal its part of CVS Health's long-term capital management strategy, which allows it to reduce its required capital and provides $200 million of collateralised excess of loss reinsurance coverage on a portion of Aetna's group commercial health insurance business.

Vitality Re X has issued health insurance-linked notes in a private offering in connection with this transaction.

"Today's transaction marks the successful completion of the tenth reinsurance arrangement under the Vitality Re program," said Eva Boratto, chief financial officer of CVS Health.

"The Vitality Re program is an important component of our capital structure that lowers our cost of capital and drives capital efficiency."