Greater Bay Re registered for China Re cat bond in Hong Kong

Greater Bay Re registered for China Re cat bond in Hong Kong

Weve discovered that the first company destined to be an insurance-linked securities (ILS) special function lorry has actually already been registered in Hong Kong, with Greater Bay Re Limited established to release a disaster bond on behalf of China Re, sources informed us.Its an essential sign of the state of preparedness of Hong Kongs legislative and regulatory framework for insurance-linked securities (ILS), showing that the Special Administrative Region is now prepared for ILS activity and to become a residence for disaster bonds.
The sponsor is also especially noteworthy, as were told it will be China Property and Casualty Reinsurance Company Ltd. (China Re P&C), part of China Reinsurance Corporation, among the biggest insurance coverage and reinsurance business in China, but also with an international footprint thanks to operations in Lloyds of London and Singapore, along with workplaces in Hong Kong and New York.
China Re had also gotten Chaucer in 2018, offering the business an even more comprehensive global specialized insurance and reinsurance footprint, including operations in Bermuda, Dubai, Australia, Miami, Dublin and other international places.
China Re is also notable as it has been the sponsor of a disaster bond before. The $50 million Panda Re Ltd. feline bond had supplied the company with three-years of indemnity reinsurance security versus losses from earthquakes in China, however was not restored at maturity.
With a broad direct exposure to disaster risks in China and likewise a growing exposure to global feline threat, China Re can certainly gain from use of the capital markets to diversify and support its retrocession and reinsurance requirements.
As Hong Kongs emerging ILS platform is seen as a potential ILS gateway to the Chinese market, if the first feline bond to be provided in Hong Kong turns out to be from a Chinese sponsor and featuring Chinese perils, it will be an especially landmark transaction.
The insurance-linked securities (ILS) market has always looked for diversity into Chinese risks, but aside from some private deals, the one-off Panda Re deal in 2015, and some private layers of reinsurance programs, there are fairly few Chinese danger focused opportunities for ILS funds or investors to allocate to.
Greater Bay Re Limited was integrated on June 23rd as a public business in Hong Kong.
The name refers to the Greater Bay Area, which represents the Guangdong, Hong Kong, Macau Greater Bay Area, and is said to be the largest and most populated urban area worldwide.
We understand it will now need to be authorised as an unique function insurer (SPI), to be allowed to undertake ILS company and function as a vehicle for issuance of a catastrophe bond.
As a result, it is still rather early days and we might not see a Greater Bay Re catastrophe bond in more detail, or pertaining to market, for some weeks or even months.
We will naturally update you if and when extra details on a Greater Bay Re Limited disaster bond, sponsored by China Re P&C (or anyone else) emerge.
You can speak with the Hong Kong Insurance Authority at our upcoming ILS Asia 2021 virtual event that starts on July 8th. Please register now to protect your location.

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