Dutch group reinsurer Achmea Reinsurance is sponsoring a catastrophe bond, ‘Windmill III Re DAC’, to provide cover for European windstorms.
The company secured €100m ($107m) of reinsurance cover from the catastrophe bond, designed to protect Achmea’s non-life insurance entities from severe weather events in Europe.
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Windmill III Re DAC is structured as a multi-arrangement special purpose vehicle in Ireland, with the sole purpose of offering per occurrence cover for losses stemming from windstorms.
These storms affect the non-life insurance portfolios of Achmea Schadeverzekeringen and Hagelunie, two of Achmea’s insurance companies.
The issuance of the 2024-1 series of notes by Windmill III Re DAC will fund the vehicle’s obligations under the reinsurance agreement with Achmea Reinsurance for a four-year period, starting from 1 July 2024 to 30 June 2028.
The deal not only provides protection but also diversifies Achmea’s catastrophe reinsurance sources.
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By GlobalDataOriginally planned to raise €75m, the transaction was upsized due to investor demand, with the notes being priced at a spread of 5.25%, which was below the initial guidance.
This marks the fourth catastrophe bond sponsored by Achmea Reinsurance and the second under the US Securities Act’s Rule 144A.
Achmea Reinsurance managing director Ewoud Bom said: “This Windmill III Re series 2024-1 issuance contributes very well to our goal to diversify our access to reinsurance capacity worldwide and to broaden and strengthen our relationships with capital market investors.
“Our choice to have Windmill III Re setup as a multi-arrangement special purpose vehicle also creates the opportunity to achieve that goal more efficiently. The good reception of our fourth issuance from investors confirms the mutual benefit of our strategy to transfer part of our risk to the capital market.”
Achmea Reinsurance’s operations primarily support the Achmea group companies, including Achmea Schadeverzekeringen, Achmea Pensioen- en Levensverzekeringen, Hagelunie, and non-Dutch entities.
Additionally, as a risk carrier, the company selectively offers life reinsurance to third parties, aiming to diversify and enhance profitability.
In February 2024, Achmea initiated preliminary discussions with NN Group and Athora, for divestment of its life insurance division.
