Insurance-Linked Securities (ILS)

In view of the repercussions of the financial market crisis, catastrophe bonds and similar securitisation instruments played a minor role in the year under review. It was therefore all the more gratifying that we were able to renew our “Eurus” catastrophe bond – first issued in 2006 – in the year under review. Instead of the originally planned EUR 75 million, we were able to place double the volume, i.e. EUR 150 million. Eurus II Ltd. covers severe windstorm events in Belgium, Denmark, Germany, France, the United Kingdom, Ireland and the Netherlands from 30 July 2009 to 31 March 2012. It protects our capital against events with a return period of 50 to 80 years. We thus retain our ability to offer our European clients protection against windstorm risks.

The “Fac Pool Re” facility marks the first time that we transferred a portfolio of facultative risks to the capital market. At stake here is not the protection of our business, but rather the direct transfer of our clients' business. With this type of risk structuring and packaging we enable ceding companies to pass on individual risks to the capital market. At the same time investors are able to access risks that would otherwise be out of their reach. The amount of capital made available under “Fac Pool Re” totalled USD 60 million, of which we assumed around USD 5 million. Further transactions are in the planning stage. What is more, the ILS fund managed by our subsidiary Hannover Insurance-Linked Securities (ILS) GmbH & Co. KG – which currently administers exclusively own funds of Hannover Re – was boosted from USD 100 million to USD 150 million on account of the successful experience.