Irish regulator facilitates first multiple-arrangement SPV ILS in domicile
UnipolSai Assicurazioni, the insurance arm of the Italian Unipol Group, has placed €100 million of insurance-linked securities (ILS) that provide it with protection against earthquake risk in Italy and neighbouring countries for a three-and-a-half-year period.
The deal was significant because it is also the first multiple-arrangement special purpose vehicle authorised by the Central Bank of Ireland for cat bond transactions. This will provide UnipolSai with increased flexibility to return to the market for future cat bond issuance through a “fast track” approval process.
While Bermuda remains the leading domicile for ILS deals with a market share of more than 75 percent, Ireland has gained traction with a number of ILS deals being issued from the domicile in recent years.
Azzurro Re II Series 2020-1 provides UnipolSai with a single €100 million tranche of fully collateralised protection. The structure features an indemnity trigger on a per occurrence basis with terms following the traditional reinsurance placement, to ensure effective integration within the overall property-catastrophe reinsurance programme.
The deal was structured and placed by Willis Re Securities in collaboration with Willis Re, the reinsurance division of Willis Towers Watson.
Quentin Perrot, head of ILS International at Willis Re Securities, said: “We are honoured to have supported UnipolSai in their third 144A catastrophe bond transaction. For the first time, a cedant has put in place a Solvency II cat bond program, allowing for a fast and efficient process for future cat bond transactions, in compliance with the Solvency II regulation.
“This demonstrates the long-lasting commitment of UnipolSai to engage with the ILS community. As usual, the level of dedication of the UnipolSai team was key to obtaining this very good result. With this new issuance, Willis Re Securities maintains its unrivalled leadership position in the structuring and placement of European ILS transactions.”
Alkis Tsimaratos, head of EMEA W/S at Willis Re, said: “We are delighted to have assisted UnipolSai in their latest ILS transaction with Azzuro Re II. This is providing a three-and-a-half-year diversifying capacity at a fixed price, accessing ILS capital for their key natural peril, Italian earthquake, and integrating this with their main catastrophe reinsurance programme.
"UnipolSai has reconfirmed their strategy of developing a long-term partnership with ILS alongside their key reinsurers, whilst providing an element of stability to their future reinsurance budgetary planning ahead of unprecedented uncertainty in future market conditions. The unique setup of Willis Re Securities fully embedded in Willis Re allowed UnipolSai to get seamless advice on all aspects of this risk transfer solution which was successfully executed as planned.”