Towers Watson subsidiary closes on $30.5 million cat bond

Towers Watson Capital Markets announced Monday it has recently arranged a private placement catastrophe bond, which closed at $30.49 million.

The Oak Leaf Re 2013-1 series of bonds has a one-year expected maturity and will provide indemnity-based, collateralized catastrophe reinsurance coverage for a Florida homeowners specialty insurance company, a brokerage client of Towers Watson, which owns TWCM.

“We are pleased to see the continuing and growing commitment of insurance-linked securities (ILS) investors to the Oak Leaf program,” Michael Popkin, TWCM’s co-head of ILS commented in the announcement.

“As a repeat issuer, the cedant was able to enhance its already established relationships with investors, which is critical in the private placement market,” he added.

TWCM said it arranged for Oak Leaf Re 2013-1 to contain three layers of the cedant’s risk management program, including a reinstatement premium protection layer.

Similar to previous years, another layer of Oak Leaf Re 2013-1 covered both a top layer for severity and an aggregate layer for frequency protection of the cedant’s program, according to TWCM.

“By working closely in an integrated fashion with traditional reinsurance brokerage placement, we ensure the capital market piece fits squarely within the overall risk transfer while providing cedants with the most efficient execution,” said Rick Miller, TWCM’s co-head of ILS added.