Investment - Articles - Swiss Re transfers extreme mortality risk to capital markets

 Swiss Re has announced the successful transfer of $275m of extreme mortality risk to the capital markets through its VITA securitization programme.

 Swiss Re entered into a transaction with VITA Capital V under which it could receive up to $275m, in the event of excess mortality in any part of a pre-defined coverage area. Vita V, in turn, has issued Series 2012-I Class D-1 and Class E-1 notes to the capital markets, each of which is linked to extreme mortality risk in the respective covered areas.

 The arrangement covers a five-year risk period starting in the issuance year and ending in 2017. This latest Vita issuance extends the geographic coverage by including Australia for the first time, reflecting Swiss Re’s global mortality business.

 "The continuing success of each Vita placement demonstrates its effectiveness in managing Swiss Re's capital and peak risk exposure, which further increases our ability to meet client needs,” commented Swiss Re's cuo, Matthias Weber.

 This is the fifth Vita securitization over the past three years, which brings the amount of extreme mortality risk protection raised by the programme to over $2.25bn.

 “Starting from the earliest stages of the life ILS market, the Vita programme has served as an anchor for market participants, helping to spur development in other innovative life structures and its consequent investor growth,” stated Swiss Re's global head Life and Health Risk Transformation, Nardeep Sangha.