Zurich Financial Services Group announced that it has obtained, through its subsidiaries, Zurich American Insurance Company and Zurich Insurance Company Ltd, a 3-year USD 225 million catastrophe excess of loss reinsurance protection from Lakeside Re II Ltd. to cover the risk of earthquakes in California.
This reinsurance transaction is a replacement of the expiring 2006 Lakeside Re Ltd. transaction.
Zurich has entered into a reinsurance transaction with Lakeside II, a special purpose reinsurance company domiciled in the Cayman Islands, to receive up to USD 225 million in payment of losses in the event of one or more California earthquakes during the 3-year period.
Lakeside II, in turn, has issued to the capital markets principal at-risk variable rate notes linked to this risk. The catastrophe bond has a floating coupon consisting of a fixed 7.75% plus a variable investment yield received by Lakeside II on the underlying assets. The offering was oversubscribed.