Hannover Re Uses CAT Bond to Protect Against European Windstorm Risks

Hannover, GERMANY

HANNOVER, Germany, July 31, 2006 (PRIMEZONE) -- Hannover Re has for the first time used a traditional CAT bond in its array of risk management tools. Eurus Ltd. issued a CAT bond with a volume of USD 150 million. The bond, which has been purchased by institutional investors in Europe and North America, affords Hannover Re windstorm protection with immediate effect for a term of approximately three years, covering seven European countries (Belgium, Denmark, France, Germany, Ireland, Netherlands and the United Kingdom). "Through 'Eurus' we have been able to transfer one of our peak natural catastrophe exposures to the capital market while at the same time successfully enlarging our investor base", Chief Executive Officer Wilhelm Zeller emphasised. "Thanks to this transaction we have expanded and hence diversified still further our risk management with the addition of a new tool. At the same time we have succeeded in profitably protecting our capital resources." Hannover Re has already transferred natural catastrophe risks to the capital market on six previous occasions in the form of private placements. "'Eurus' is the first transaction where the bond certificates can also be traded on a secondary market," Mr. Zeller added. The bond, which has a parametric trigger structure, protects Hannover Re against windstorm events that attain a certain predefined wind speed. The bond was rated 'BB' by the rating agency Standard & Poor's.

Hannover Re, with a gross premium of approximately EUR 10 billion, is one of the largest reinsurance groups in the world. It transacts all lines of property/casualty, life/health and financial reinsurance as well as specialty insurance. It maintains business relations with more than 5,000 insurance companies in about 150 countries. Its worldwide network consists of more than 100 subsidiaries, branch and representative offices in 18 countries. The rating agencies most relevant to the insurance industry have awarded Hannover Re very strong insurer financial strength ratings (Standard & Poor's AA -- "Very Strong" and A.M. Best A "Excellent").

Disclaimer: Some of the statements in this press release may be forward-looking statements or statements of future expectations based on currently available information. Such statements are naturally subject to risks and uncertainties. Factors such as the development of general economic conditions, future market conditions, unusual catastrophic loss events, changes in the capital markets and other circumstances may cause the actual events or results to be materially different from those anticipated by such statements. Hannover Re does not make any representation or warranty, express or implied, as to the accuracy, completeness or updated status of such statements. Therefore, in no case whatsoever will Hannover Re and its affiliate companies be liable to anyone for any decision made or action taken in conjunction with the information and/or statements in this press release or for any related damages.


Contact Data