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Risk Management Solutions announced that Munich Re and Tokio Marine Nisshin Fire have closed a private catastrophe swap based on its industry loss index, Paradex-Europe Windstorm.

“This transaction now brings the total notional amount of risk transferred using Paradex-Europe Windstorm to over $250 million,” said the bulletin.

RMS explained: “The index uses wind speed measurements in specific locations to calculate insured loss estimates based on RMS industry exposure data, and allows transactions to settle quickly and objectively.”

“We are excited that these two respected reinsurers have selected Paradex as the best solution to transfer Europe Windstorm risk,” stated Peter Nakada, Managing Director at RMS. “This marks an important development in the way catastrophe swap transactions are structured, and underscores how the index can be applied across the insurance-linked securities market.”

RMS pointed out that “in addition to supporting the catastrophe derivatives market,” it also believes that the “Paradex-Europe Windstorm – which uniquely calculates insured losses at a detailed, local level and can be aggregated by region, country, or Europe-wide to suit the e underlying portfolio – will provide a common ‘currency’ for the European industry loss warranty market.”

“For some time, industry loss warranty traders have been seeking an objective third-party index for settling transactions. Paradex-Europe Windstorm meets this need,” Nakada added.

Source: Risk Management Solutions –

Topics Catastrophe Europe