The Taiping Reinsurance Company through a special purpose insurer Silk Road Re has issued $35m catastrophe bonds that offer three years of protection starting 1 January 2025 by covering named storms in the US and earthquakes in mainland China.
Welcoming the issuance the Insurance Authority of Hong Kong in a statement said, “This is the sixth insurance-linked securities (ILS) issued in Hong Kong and the first locally issued ILS tied to multiple perils and triggers.
IA said, “It reinforces our commitment to forging a holistic ecosystem that embraces data harvesting, catastrophe modelling, product design, investor education and talent nurturing as well as to narrowing the protection gap caused by the rising frequency and intensity of natural catastrophes.”
The IA underscored the significance of this development in expanding the local insurance-linked securities (ILS) market.
A IA spokesperson said this is the sixth issuance of CAT bonds that has happened since the introduction of a bespoke regulatory regime and a pilot grant scheme in 2021 involving a total sum of about HK$5.86bn ($748m).