Mitsui Sumitomo, Aioi Nissay issue joint cat bonds

This issuance marks the 7th for Mitsui Sumitomo Insurance.

Mitsui Sumitomo Insurance and Aioi Nissay Dowa Insurance both members of the MS&AD Insurance Group Holdings, have launched the "Tomoni Re 2024" catastrophe bonds (cat bonds) in Singapore. 

These bonds aim to cover domestic natural disaster risks in Japan and reinforce risk management while enhancing the resilience of society. 

This issuance marks the 7th for Mitsui Sumitomo Insurance and the 3rd for Aioi Nissay Dowa Insurance.

Two tranches of notes have been issued by "Tomoni Re" a Singapore-based special-purpose reinsurance vehicle sponsored by Mitsui Sumitomo Insurance and Aioi Nissay Dowa.

ALSO READ: Mitsui Sumitomo Insurance's strategic initiatives to drive performance: AM Best

Each class of notes provides indemnity reinsurance protection. When losses due to natural disasters in Japan exceed a certain threshold, a portion or the entire amount of the principal is paid to the sponsors as reinsurance.

The Class A tranche provides Mitsui Sumitomo Insurance with $100m of typhoon and flood protection on a per occurrence basis, achieving competitive spread compared to similar risk levels.

The Class B tranche provides Aioi Nissay Dowa with $100m coverage for typhoon, flood, and earthquake on a per occurrence basis, and earthquakes on a three-year rolling aggregate basis by the same shared limit, a unique structure in the global cat bond market.

Mitsui Sumitomo Insurance and Aioi Nissay Dowa Insurance have diversified their capacity sources and secured long-term coverage by jointly issuing catastrophe bonds.

This issuance leverages the expertise of both companies to enhance the group's risk management strategies through the purchase of reinsurance.