Assurant raises $130 mln of cat bond protection

LONDON Feb 1 (Reuters) - U.S. insurer Assurant has raised $130 million, more than expected, through a sale of catastrophe bonds designed to help it absorb potential hurricane claims.

The bond issue exceeds the $100 million of protection that market sources said Assurant was seeking when it began marketing the notes earlier this month.

Several cat bond deals have exceeded their original target size in recent weeks as insurers and reinsurers take advantage of pent-up investor demand for the securities after a series of big natural disasters weighed on new issuance last year.

Cat bonds were developed in the 1990s to help insurers and reinsurers manage their exposure to natural disasters by transferring some of the risk on their books to pension funds and other capital market investors.

Buyers of cat bonds are largely insulated from wider macroeconomic or financial market developments but risk losing some or all of their money if a natural disaster occurs.

The Assurant bonds protect the insurer against hurricane-related losses on the eastern U.S. coast and Gulf of Mexico, and expire in May 2012.

Sold through Assurant's Cayman Islands-based Ibis Re vehicle, the two-tranche bond has received credit ratings of BB-(sf) and B-(sf) from Standard & Poor's.