Farmers Insurance Group has returned to the catastrophe bond market for its second sponsorship, seeking at least $300 million of multi-peril US catastrophe reinsurance protection from the capital markets with a issuance.Back in December 2021, Farmers Insurance Group, which is a US insurer that also operates across a variety of reciprocal insurer brands and has links to Zurich Insurance Group, sponsored its debut catastrophe bond.That deal saw Farmers securing a $160 million source of collateralized reinsurance which provided the company with multi-year occurrence and aggregate cover across peak perils through a  issuance.The Topanga Re Series 2021-1 deal was initially viewed as potentially at risk of loss from the California wildfires that occurred at the start of this year, but .

Using the same Bermuda based special purpose insurer (SPI) named Topanga Re Ltd., this Series 2025-1 issuance for Farmers sees two tranches of cat bond notes on offer.With this new cat bond, Farmers Insurance Group aims to secure a minimum $300 million of per-occurrence catastrophe reinsurance protection, so it’s encouraging to see this being larger already than the insurer’s first.The two tranches of Topanga Re Series 2025-1 cat bond notes will both provide Farmers and its subsidiary underwriting entities with reinsurance protection against certain losses from named storms, earthquakes, severe weather and wildfires affecting the United States.

A $200 million Class A tranche of notes are being issued to provide Farmers with per-occurrence and indemnity trigger protection over a four-year term, starting at the beginning of 2026 to the end of 2029.The Class A tranche of notes attach at $1 billion and exhaust that protection at $1.3 billion, we understand, although sources said that stated and inuring reinsurance layers mean the effective attachment would actually be at $3 billion for a first event.The Class A notes come with an initial base attachment probability of 1.7%, an initial base expected loss of 1.47%, and they are being offered to cat bond investors with price guidance for a spread in a range from 4.75% to 5.25%.

The Class B tranche of notes are sized at $100 million and will also provide per-occurrence and indemnity trigger protection over a four-year term attaching at $2.1 billion and exhaust that protection at $2.9 billion.There is no inuring reinsurance for these notes, so the attachment is as stated we are told.The Class B tranche of notes come with an initial base attachment probability of 3.33%, an initial base expected loss of 2.42%, and are being offered to investors with price guidance for a spread in a range from 6.25% to 6.75%.

It’s also important to note that we understand this Topanga Re (Series 2025-1) cat bond issuance also With Famers’ issuance set to mature at the end of this year, its safe to say that this new cat bond issuance is a renewal of sorts, and so it’s particularly encouraging to see Farmers looking to build on this with a larger deal to run for an additional four years.You can read all about this new  catastrophe bond and view details on almost every other cat bond ever issued in our extensive Artemis Deal Directory..All of our Artemis Live insurance-linked securities (ILS), catastrophe bonds and reinsurance can be accessed online.

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