Protection Structure
Catastrophe Bond

On 25 August 2003, Taiwan successfully issued a catastrophe bond for the Taiwan Residential Earthquake Insurance Pool (TREIP). The issue is a significant achievement in our financial history and makes Taiwan the second country in Asia, following Japan , to issue a catastrophe bond. This symbolizes an important milestone in the development of the financial and insurance industry in Taiwan . The term of the TREIP catastrophe bond is nearly three years. In order to obtain full protection, the bond is designed to trigger on an indemnity basis.

The reasons for issuing a catastrophe bond in Taiwan includeˇG
To gain a strategic negotiating position for the reinsurance price as well as more capacity than was available through traditional reinsurance.
2. To provide a stable and diversified source of capacity.
3. To maintain high credit quality.
4. To gain valuable experience and professional knowledge in the area of alternative risk transfer.