ZURICH OBTAINS $270M OF NORTH AMERICA EARTHQUAKE PROTECTION
(The following is a reformatted version of a press release issued by Zurich Insurance Group and received via electronic mail. The release was confirmed by the sender.)
Zurich obtains USD 270 million of North America earthquake protection from Lakeside Re III Ltd.
Zurich, January 3, 2013 - Zurich Insurance Group (Zurich) today announced that it has obtained, through its subsidiaries Zurich American Insurance Company and Zurich Insurance Company Ltd, a 3-year USD 270 million catastrophe excess of loss reinsurance protection from Lakeside Re III Ltd. (Lakeside III) to cover the risk of earthquakes in specific territories in North America. The cover offers protection on an annual aggregate basis. This reinsurance transaction is a replacement of the expiring 2009 Lakeside Re II Ltd. transaction.
Zurich has entered into a reinsurance transaction with Lakeside III, a special purpose reinsurance company domiciled in Bermuda, to receive up to USD 270 million in payment of losses in the event of one or more North America earthquakes during the 3-year period. Lakeside III, in turn, has issued to the capital markets principal at-risk variable rate notes linked to this risk. The catastrophe bond has a floating coupon consisting of a fixed 8% plus a variable investment yield received by Lakeside III on the underlying assets. The offering was oversubscribed.