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RMS Models Risk for PennUnion Re Ltd to Provide Amtrak with $275 million Hurricane and Earthquake Protection
NEWARK, Calif. -
October 14, 2015 -
RMS, the world’s leading catastrophe risk management firm, today announced it provided the risk analysis for the PennUnion Re Ltd Series 2015-1 Notes. The parametric bond transfers $275 million of catastrophic hurricane and earthquake risk to the capital markets, providing Amtrak with financial protection for its assets in the Northeast Corridor.
In addition to the risk analysis, RMS also provided consulting support to help Amtrak strengthen its risk transfer strategy. Combined, the bond and preparatory consulting work by RMS equips Amtrak to define the probability and severity of potential catastrophic scenarios, assess the risk that it currently holds, and evaluate the cost benefit of disaster risk mitigation policies.
“RMS is delighted to have helped develop PennUnion Re Ltd, protecting Amtrak-owned infrastructure along one of the most important railroads in the northeast region,” said Ben Brookes, vice president of capital markets at RMS. “The bond’s robust trigger, based on measured hazard values, will help Amtrak receive a quick settlement, enabling the agency to recover quickly following a hurricane or earthquake.”
PennUnion Re enables Amtrak to cover the cost of disasters by tapping new risk financing outside the traditional reinsurance markets.
“This is the first time Amtrak has used the capital markets to broaden our base of insurance coverage,” said Gerald Sokol, Jr., Amtrak executive vice president and chief financial officer. “The catastrophe bond market provides us with a means to diversify our sources of insurance in a cost effective manner.”
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