Global re/insurance broker Aon has structured and placed the first catastrophe bond issued from a Hong Kong domicile.
Executed by Aon Securities (Hong Kong), the cat bond was sponsored by non-life reinsurance firm China Property & Casualty Reinsurance Company and provides $30 million-per-occurrence typhoon catastrophe protection.
Aon states that a meaningful percentage of the bond’s investors were local to Hong Kong, something it attributes to regional support for insurance-linked securities (ILS) as a diversifying asset class.
This announcement confirms reports from our ILS-focused sister publication Artemis that a cat bond had been privately marketed to a handful of specialist funds and investors by the broker.
The transaction, issued by Greater Bay Re Limited, positions Hong Kong as an important gateway for global capital to support sustainable growth in China through non-traditional risk transfer solutions.
“As the first catastrophe bond to have been issued from Hong Kong, Greater Bay Re represents a significant milestone for the insurance industry in supporting the development of Guangdong-Hong
Kong-Macau Greater Bay Area through the provision of typhoon catastrophe protection,” Zhang Renjiang, General Manager of China Property & Casualty Reinsurance Company.
Paul Schultz, CEO of Aon Securities, noted, “This pioneering transaction demonstrates the potential for Hong Kong to become an important risk transfer hub for the region.
“The global insurance-linked securities sector has had its strongest year ever, and we believe that solutions such as the CPCR catastrophe bond can only serve to maintain momentum and solidify the position of ILS as an effective component of companies’ risk transfer strategies as they rethink access to capital.”
Qin Lu, CEO of Aon’s Reinsurance Solutions Greater China and Aon’s Commercial Risk Solutions China, added, “We are excited that Aon has brought to market the first catastrophe bond issued from the Special Administrative Region of Hong Kong to provide protection for CPCR’s underlying catastrophe exposures.
“It is critical that we as an industry continue to develop and apply a range of solutions to close protection gaps for governments, organizations, communities and individuals.”
