Taiping Re has also developed its internal catastrophe risks model. Credit: Yuriy K / Shutterstock.

Taiping Re, a unit of China Taiping Insurance Group, has issued Asia’s dual-perils, dual-triggers catastrophe bond (CAT bond) in Hong Kong to bolster its catastrophe risk management.

This offering is designed to cover the risks of earthquakes in China and hurricanes in the US, using both parametric and industry loss index triggers for fully collateralised coverage.

With a three-year term, the $35m CAT bond was issued through a special purpose insurer named Silk Road Re.

It is said to be Asia’s first dual-perils, dual-triggers CAT bond, oversubscribed and priced at the lower end of the indicative offer price range. 

Taiping Re CEO YU Xiaodong said: “This issuance marks a significant milestone for Taiping Re in accessing the insurance-linked securities (ILS) market. With Hong Kong’s mature capital market, comprehensive financial system and robust regulatory framework, as well as support from the Hong Kong Insurance Authority (HKIA), professional service providers and global investors, the issuance has achieved effective diversification for the company’s catastrophic risk management.” 

Last year, Taiping Re became one of the first signatories of the “Insurance Industry Climate Charter”, an initiative by the Hong Kong Federation of Insurers to address climate-related risks.

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The company has also developed its internal catastrophe risks model, under the Hong Kong Risk-based Capital (RBC) regime that has received approval from the HKIA. 

In partnership with a university in Hong Kong, the company has developed a customised flood catastrophe model, which has secured funding from the Innovation and Technology Commission of the Hong Kong SAR Government.

Additionally, Taiping Re has been implementing and enhancing the Macau Catastrophe Property Insurance Scheme for small and medium-sized enterprises (SMEs), working closely with the Macau SAR Government for six years.