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Hedge Fund Investors Protect Themselves With $180 Million Against Market Deterioration

New York (HedgeCo.net) – Swiss Re has announced the successful transfer of $180 million of extreme mortality risk to the capital markets. Swiss Re has a history of obtaining over $2.0 billion in extreme mortality risk protection.

“Swiss Re has entered into a transaction with VITA Capital IV Ltd. (“Vita IV”) , under which it may receive up to $100 million and up to $80 million, respectively, in the event of extreme mortality in any part of a pre-defined coverage area. Vita IV, in turn, has issued Series V and VI notes to the capital markets. Since its launch in 2009, Vita IV has been used to transfer nearly USD 500 million of mortality risk to the capital markets.”

The latest takedown from the Vita IV programme is a continuation of Swiss Re’s hedging strategy, enabling the company to manage extreme mortality exposures in a capital-efficient manner.

“We believe the life ILS market is approaching a tipping point which will lead to robust growth, for both issuers and investors,” Swiss Re’s Division Head, Life & Health, Alison Mckie, said.

Alex Akesson

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