Willis Re Securities in collaboration with Willis Re, the reinsurance division of Willis Towers Watson (NASDAQ: WLTW), a leading global advisory, broking and solutions company, announced it has structured and placed $100 million of insurance-linked securities for Minnesota Life, a life insurance subsidiary of Securian Financial Group Inc. (“Securian”), a leading life mutual insurance group.
La Vie Re, which closed October 23, is the first underwritten Rule 144A cat bond exposed to extreme mortality risk on an indemnity basis. It provides Minnesota Life and Securian Financial Group with a single $100 million tranche of fully collateralized protection against a deterioration of the performance of its group life business over a three-year period. The structure features an indemnity trigger on an annual loss ratio basis.
Despite the uncertain environment of COVID-19, investors recognized the high quality cedant, its marginal risk and robust structure. The transaction is priced with an annual risk spread of 2.85%.
“We are proud to have supported Securian in its inaugural catastrophe bond transaction,” said Quentin Perrot, senior vice president, Willis Re Securities. “Thanks to the robust structure that an underwritten Rule 144A cat bond offers, investors have supported this first indemnity extreme mortality bond. This speaks to the increased openness of the ILS market to not only broaden the scope of assumed risks, but also recognises the strength of the Minnesota Life portfolio.”
“The La Vie Re cat bond will allow Securian Financial a long term and more sustainable access to the broader capital market investors. It demonstrates Securian Financial’s strategic utilisation of all the available sources of reinsurance capital,” said Jim Fallon, executive vice president, Willis Re. “Our team’s deep technical knowledge of Life, Accident and Health risk, ability to collaborate with our client and determination to find optimal solutions, were instrumental in successfully navigating the challenges of the present market environment. We are delighted to strengthen our relationship with Securian Financial through the issuance of this catastrophe bond.”
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