Nearly $100 million in Massachusetts's hurricane risk has been transferred to the capital markets thanks to a catastrophe bond issuance provided by Munich Re.
"The capital markets constitute a good complementary risk carrier for specialized peak risk like Massachusetts hurricane," said Tony Kuczinski, president and chief executive officer of Munich Reinsurance America Inc., in a statement.
Munich Reinsurance America, acting as joint lead manager, reinsured a portion of a catastrophic hurricane risk layer of the Massachusetts Property Insurance Underwriting Association (MPIUA), fully "retroceded" to special purpose reinsurer, Shore Re Ltd., with a volume of $96 million, according to Munich Re.
The issuance will provide cover for extreme losses caused by a hurricane in Massachusetts.
Also known as the Fair Plan, the MPIUA is the insurer of last-resort in Massachusetts. All companies writing property insurance are required to participate, with losses shared among members.
