French reinsurer SCOR has sponsored its second catastrophe bond under the UK’s insurance-linked securities regime (ILS), which will provide it with up to $250m in cover against named storms in the US, earthquakes in the US and Canada, and windstorms in Europe.
Atlas Capital UK 2019 will run from June 1, 2019, to May 31, 2023, and has received approval from the Prudential Regulatory Authority (PRA) and the UK regulatory authorities.
The UK’s ILS regulations came into force in December 2017, and allow the set-up of insurance special purpose vehicle and protected cell companies with exemption from corporation tax on insurance risk transformation profits and a complete withholding tax exemption for non-UK investors.
SCOR became the first reinsurer to use the UK’s ILS regime to issue a cat bond in 2019.
“Having been the first company to successfully sponsor a cat bond under the UK ILS regime in 2018 and continuing its policy of diversifying capital protection tools, SCOR has returned to the London Market to issue Atlas Capital UK 2019,” said Jean-Paul Conoscente, CEO of SCOR Global P&C.
The capital shield policy is a strategic axis for SCOR. The group has regularly used capital market solutions for this purpose, having completed 16 transactions since 1999, including cat bonds, sidecars, mortality bonds and innovative contingent capital protections.
Conoscente continued: “The strength of support for this transaction enabled SCOR to upsize it despite current market conditions – which is reflective of the quality of SCOR’s franchise and reputation as an innovative and long-term sponsor. The SCOR team is grateful to the PRA and the other UK regulatory authorities involved for the speed and efficiency they have once again demonstrated in their review and approval of the transaction.”
GC Securities acted as sole structuring agent, GC Securities and Aon acted as joint bookrunners for the deal and Clifford Chance advised SCOR.
SCOR, Atlas Capital UK, ILS, London, UK