Progressive, the US insurance company, is back in the catastrophe bond market seeking a $70 million or greater one-year source of annual aggregate and multi-peril reinsurance protection from the capital markets, through a issuance, Artemis understands.For it’s latest catastrophe bond, Progressive is aiming to secure additional aggregate property catastrophe reinsurance in fully-collateralized form through this catastrophe bond, with just a single tranche of discounted zero-coupon notes being offered.This will become the ninth in the Bonanza Re series of cat bond deals.Over the years the cedent beneficiaries of Bonanza Re cat bond protection have changed with acquisitions made, but we understand this latest one will provide its reinsurance across Progressive’s home insurance and commercial portfolio of companies.

We’ve learned from sources that Bermuda based special purpose insurer Bonanza Re Ltd.will issue a single tranche of Series 2025-1 Class A discount zero-coupon cat bond notes, with the proceeds from their sale used to collateralize a single-year reinsurance arrangement for the Progressive insurance companies.The initial target for Progressive is to secure $70 million or more in indemnity triggered, annual aggregate US focused reinsurance from the capital markets from this Bonanza Re 2025-1 cat bond deal.

The Bonanza Re 2025-1 cat bond will provide the insurer with one year of aggregate reinsurance covering qualifying losses from the perils of named storm, earthquake (fire-following only), severe thunderstorm, winter storm and wildfire across the United States, with this coverage running across calendar year 2026, we understand.The currently $70 million of Series 2025-1 Class A notes that Bonanza Re Ltd.is offering would attach their coverage at $550 million of qualifying losses and exhaust coverage at $750 million, while we are told that there is a per-event deductible of $20 million and an event cap of $280 million, under the terms of the aggregate reinsurance agreement.

Which effectively means the notes could attach on two larger qualifying events that exceed the per-event cap, but only just.The notes will have an initial attachment probability of 9.42%, an initial expected loss of 5.53% and are being offered with price guidance in a range from 80% to 82% of par (being zero-coupon in nature), sources said, a very rough spread equivalent of 18% to 20%.Last year for comparison, as part of its $345 million cat bond issuance which was the largest the company has brought to market, Progressive sponsored an aggregate tranche of one-year notes with an initial expected loss of 4.09% that were also zero-coupon discount notes and priced at 80% of par.

That tranche of aggregate notes had different terms and conditions though, so it is hard to compare directly.Progressive clearly sees value in aggregate protection and given conditions in the cat bond market may see an opportunity to lock-in more of this cover and replace that maturing tranche from the Bonanza Re 2024-1 cat bond.It’s also worth highlighting Progressive’s appetite for aggregate protection from its traditional reinsurance renewal this year, when .

You can read all about this catastrophe bond and every other cat bond ever issued in the Artemis Deal Directory..All of our Artemis Live insurance-linked securities (ILS), catastrophe bonds and reinsurance can be accessed online.Our can be subscribed to using the typical podcast services providers, including Apple, Google, Spotify and more.