Taiping Reinsurance has successfully launched Asia’s first dual-perils, dual-triggers catastrophe bond (CAT bond) in Hong Kong, marking a significant milestone in the region’s insurance and capital markets.
The $35 million bond, issued through a special purpose insurer named Silk Road Re, provides coverage for two distinct risks: earthquake hazards in China and hurricanes in the United States.
With a three-year term, the bond combines both parametric and industry loss index triggers, offering fully collateralized coverage. The innovative structure of the bond has drawn considerable interest from institutional investors, resulting in oversubscription and pricing within the lower end of the indicative range.
Yu Xiaodong, CEO of Taiping Re, highlighted Hong Kong’s robust financial ecosystem and supportive regulatory environment as key factors contributing to the bond’s success. He emphasized that the dual-trigger structure not only facilitates effective risk diversification but also strengthens the link between the insurance industry and capital markets.
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