French terror risk pool GAREAT diversifies sources of reinsurance with first catastrophe bond

GAREAT, the French terrorism risk insurance pool, is sponsoring its first catastrophe bond, Athéna I Reinsurance DAC, to diversify its sources of reinsurance risk capital, as reported by our insurance-linked securities (ILS) focused sister publication, Artemis.

Established in 2002 as a public-private partnership market structure, GAREAT, or Gestion de l’Assurance et de la Réassurance des Risques Attentats et actes de Terrorisme, manages the reinsurance of risk of terrorist attacks in France and the country’s overseas territories.

As reported by Artemis, the co-reinsurance terrorism risk pool was expected to enter the catastrophe bond market this year, and details of its inaugural transaction have now come to light.

Currently sized at €100 million (USD 109m), Athéna I Reinsurance DAC will provided retrocession reinsurance to GAREAT.

The Artemis deal page for this cat bond explains that members cover the first €500 million of any terror attack under the scheme, following which the pooled excess-of-loss reinsurance provides protection up to €2.8 billion, beyond which CCR provides coverage backed by state guarantee.

Artemis sources confirmed that the catastrophe bond will cover a share of €200 million of the risks. It’s understood that the retro reinsurance will attach at €500 million in losses to GAREAT, covering a share of losses up to €700 million.

Sources also told Artemis that the tranche of cat bond notes will provide GAREAT with indemnity reinsurance protection on an annual aggregate basis, starting from January 1st, 2025, and running three annual risk periods to the end of 2028.

You can read all about this transaction and many other cat bonds on the Artemis Deal Directory.

This website states: The content on this site is sourced from the internet. If there is any infringement, please contact us and we will handle it promptly.