FM Global places catastrophe bond on BC fault line

Factory Mutual Insurance Co. recently issued its first private placement of a US$300 million catastrophe bond as insurance against earthquake loss in the Pacific Northwest region of the United States and Canada. Operating as FM Global, a mutual commercial and industrial property insurer, the Company instigated the transaction to protect its balance sheet and provide policyholders with financial protection in the occurrence of unusual earthquake activity along the Cascadia Subduction Zone. According to CFO Jeff Burchill, Johnston, R.I. the Company’s scientists recently validated a scientific consensus that concluded the possibility of earthquake activity along fault which extends from British Columbia to northern California every 500 years. This activity, according to the scientific community, could release significantly more energy than previously realized. The fault extends from southern British Columbia in Canada to northern California.