Allianz has sponsored a new catastrophe bond (cat bond), securing a multi-year risk transfer capacity of €250 million, designed to provide protection against European windstorms. Notably, this also marks the first cat bond issued for Allianz’s own account in over a decade.

For the bond, the insurance giant entered into a three-year reinsurance agreement with Blue Sky Re DAC, a special purpose vehicle based in Ireland. The notes issued as part of the cat bond were met with strong interest and high demand from capital market investors.

The cat bond is integrated into Allianz’s comprehensive catastrophe reinsurance strategy. It serves to augment and diversify the company’s reinsurance protection against natural disasters. The bond offers a multi-year coverage period, extending from January 2024 to December 2026. Its activation will be based on an insurance industry loss index, a common trigger mechanism in cat bonds.

“Allianz is pleased to secure multi-year protection against our peak natural peril, windstorms in Europe, by returning to the insurance-linked securities market. Restarting our cat bond journey with Blue Sky Re in 2023 broadens our risk mitigation toolbox,” Allianz Re group reinsurance officer Thorsten Fromhold said.

A recent report from Swiss Re highlighted that the issuance of catastrophe bonds (cat bonds) reached a record high of US$15 billion, signaling robust investor interest and growing demand for risk transfer of significant natural catastrophes.

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