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AXA close to second motor securitisation

AXA is set to securitise a further portion of its motor portfolio some 18 months after its landmark FCC Sparc transaction.

The firm’s head of corporate finance and treasury, Emmanuel Vercoustre, confirmed last week that the insurance giant is looking to transfer a “traditional motor book” with premium income of just under EUR2bn to the capital markets.

The programme – which covers AXA motor business in Germany, Belgium, Spain and Italy – will be worth approximately EUR400mn and is set to go live in June/July.

AXA’s EUR200mn securitisation, FCC Sparc, in late 2005 was heralded as a landmark deal because it saw the capital markets’ absorb high frequency, low volatility exposures. Until then, the vast majority of non-life insurance securitisations had been catastrophe risks. Although this still remains the case, the industry has continued to push the boundaries and, in the last year, risks as varied as life mortality, credit reinsurance and even liability exposures (in the form of Avalon Re) have been repackaged onto the capital markets.

In addition, the insurer is also looking to launch a cat bond later this year to protect its balance sheet from European wind exposures, according to reports.

Earlier this month, Allianz revealed that it had become the first insurer to transfer flood risk to the capital markets via a $150mn securitisation, Blue Wings. 2006 was a record year for cat bonds with some $4.69bn issued, a 136 percent increase on the previous year, according to Guy Carpenter.     

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