Reinsurance intermediary Guy Carpenter and catastrophe modeling firm Risk Management Solutions say they helped the Metropolitan Transportation Authority sell the first-ever bond to protect against storm surge.
With the bond, the MTA secured $200 million in insurance protection to help pay for damages like those it suffered during Superstorm Sandy last year. Repair costs totaled $4.8 billion from the late October storm.
“In the aftermath of Superstorm Sandy, the traditional avenues we use for insurance and reinsurance contracted dramatically, making it exceedingly difficult for the MTA to obtain insurance,” says Thomas F. Prendergast, MTA chairman and CEO. “We anticipate that this deal represents the start of a long-term alternative reinsurance option that diversifies MTA's risk management strategy.”
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