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Hannover Re - L4 Life Reinsurance Securitization

Client Need

Hannover Re approached RISConsulting to assist it in developing a solution for managing the financing burden, accounting impact (P&L and surplus) and reinsurance risk associated with new life reinsurance business for three underwriting years of account. Hannover Re's goal was to utilize external funding sources to cover the new business strain and to repay the initial funding with future profits from the acquired business.

The Solution

In cooperation with Hannover Re, RISConsulting developed a financing structure and assisted Hannover Re in arranging a bank partner to execute the transaction, which was completed on very favorable pricing and terms relative to previous Hannover Re "L" (life securitization) transactions.

The Result

Through the L4 financing facility, Hannover Re was able to alleviate the strain of new business financing which enabled it to continue its expansion strategy in targeted markets. The deal closed in December of 2000.