SCOR has successfully sponsored a new catastrophe bond (“cat bond”), Atlas Capital DAC Series 2023-1, which will provide the Group with multi-year risk transfer capacity of USD 75 million to protect itself against named storms in the U.S. and earthquakes in the U.S. and Canada, as well as European windstorms. The risk period for Atlas Capital DAC Series 2023-1 will run from June 1st, 2023, to May 31st, 2026. The transaction has received the approval of the Irish regulatory authorities. The cat bond offering integrates ESG related considerations to support investors' due diligence.
The cat bond was priced on May 17th, 2023, and closed on May 26th, 2023. Despite a significant market hardening since the end of 2022, Atlas Capital DAC Series 2023-1 was well received and benefited from high investor demand. GC Securities1 acted as Sole Structuring Agent and Sole Bookrunner for the deal. Willkie Farr and Walkers advised SCOR as legal counsels.
Atlas Capital DAC Series 2023-1 is an aggregate, index-based trigger cat bond issued by Atlas Capital DAC, a multi-arrangement special purpose vehicle approved in Ireland under Solvency II. This new vehicle may be utilized by the Group to sponsor future cat bonds in order to secure protection against various perils in both L&H and P&C in a more dynamic and cost-effective manner.
The size of the cat bond was adapted in line with the significant reduction of SCOR’s cat exposures over the last 18 months. SCOR is now in an ideal position to harvest the benefits from an attractive cat reinsurance environment in 2024 and beyond. It also confirms SCOR’s commitment to regular cat bond issuances in line with its past strategy.
Maintenance of an efficient capital shield is a strategic cornerstone of the SCOR group, which deploys a full array of capital market solutions.
Jean-Paul Conoscente, CEO of SCOR P&C, comments: “SCOR is pleased to turn once again to the ILS market and secure multi-year protection against peak natural perils. Cat bonds are an integral part of capital protection for SCOR, which has been a regular sponsor for more than two decades. The market recognized and supported our commitment to the asset class, and we are delighted with the strong investor demand. A novelty with Atlas 2023 is the establishment of a new type of vehicle which may be used for future cat bonds across both P&C and L&H, and we are grateful to the Irish regulatory bodies for their support and responsiveness during this transaction.”
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Footnotes:
1GC Securities is a division of MMC Securities LLC, a U.S. registered broker-dealer and member of FINRA/NFA/SIPC.
