Swiss Re to Issue First Longevity-Linked Cat Bond

Swiss Re is preparing to issue the first catastrophe bond linked to longevity risk.

Catastrophe bonds ("cat bonds") are insurance linked securities that pass along risks to capital markets participants rather than an insurance company balance sheet.

Cat bonds are more commonly structured for natural disasters such as earthquakes or hurricanes.

The Swiss Re security is an eight year bond that will be based on the difference between the annualized mortality improvement in a UK-based age group and the annualized mortality improvement in a U.S. age group.

Standard and Poor's has rated the security BB+.  The amount of the bond issue has not been disclosed.

The bond will be issued through a Cayman-based special purpose vehicle called Kortis Capital Ltd.

Source: Reuters

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