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Swiss Re Securitizes Again

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Swiss Reinsurance Company says it has succeeded at securitizing a substantial amount of extreme mortality risk for the third time in less than 12 months.

Swiss Re, Zurich, says it has transferred about $175 million in mortality risk through the Vita Capital IV Ltd. securitization program.

Swiss Re sold notes linked to Vita IV through a private placement.

Through the Vita IV notes, Swiss Re can get payments of up to $100 million in the event of severe mortality in the United States or Japan, and up to $75 million in the event of severe mortality in Canada or Germany.

Swiss Re sold similar batches of Vita program notes in November 2009 and May 2010. The first Vita notes securitized mortality risk in the United States and the United Kingdom, the company says.

In 2008, the credit market crisis raised questions about whether reinsurers would continue to have adequate access to investor capital.

The Vita IV program collateral consists of securities issued by the International Bank for Reconstruction and Development, Swiss Re says.

- Allison Bell