The North Carolina Farm Bureau has returned to the catastrophe bond market for the second time, seeking to sponsor a $325 million issuance of cat bond notes that will expand its capital markets backed reinsurance to include additional perils, while also adding aggregate protection for the first time.The North Carolina Farm Bureau is a non-profit general farm organisation that also provides financial services, including insurance products, to its member base.Back in November 2023, the North Carolina Farm Bureau (NC Farm Bureau) sponsored its debut catastrophe bond, securing a $400 million source of capital markets backed indemnity and per-occurrence structured named storm reinsurance protection through a cat bond issuance.That first cat bond sponsorship remains in-force and the coverage from the Series 2023-1 notes runs until the end of 2026.

So it is encouraging to see the NC Farm Bureau return, as it shows a desire to expand on its catastrophe bond protection, while also staggering the scheduled maturities of the Blue Ridge Re notes to provide overlapping cover from the cat bond market.Using the same Bermuda based special purpose insurer (SPI) named Blue Ridge Re Ltd., this Series 2025-1 issuance sees four tranches of cat bond notes on offer.The new cat bond is designed to provide broader catastrophe reinsurance coverage for the NC Farm Bureau as well, given it features multiple perils and an aggregate tranche of notes as well as three to offer per-occurrence protection to the sponsor.

Blue Ridge Re Ltd.is offering four tranches of Series 2025-1 catastrophe bond notes to investors, with each set to provide reinsurance covering losses in the state of North Carolina to the same underwriting entities North Carolina Farm Bureau Insurance Company and Farm Bureau Insurance of North Carolina as were protected by the first cat bond.Global reinsurance giant Hannover Re is again acting as the ceding reinsurer, entering into a retrocession agreement with the issuer Blue Ridge Re, and then passing on the reinsurance protection to the NC Farm Bureau insurers.

The four tranches of notes will provide three years of coverage for calendar years 2026 through 2028 across the state of North Carolina against losses from named storms, severe thunderstorms and winter storms, we are told, and the initial target is for $325 million of protection across the Series 2025-1 issuance.Two tranches of notes will cover named storms and severe thunderstorms on a per-occurrence basis, one will cover only named storms on a per-occurrence basis and the fourth tranche is the one that will provide annual aggregate protection for losses from named storms, severe thunderstorms and winter storms, with all four tranches using an indemnity trigger, we understand.A Class A tranche of notes are sized at $100 million and will provide named storm and severe thunderstorm per-occurrence protection attaching at $1 billion of losses and covering a share up to $1.65 billion, giving them an initial attachment probability of 1.56%, an initial expected loss of 1.1% and these come with price guidance in a range from 4% to 4.5%.

A Class B tranche of notes are also sized at $100 million and will provide named storm and severe thunderstorm per-occurrence protection attaching at $500 million of losses and covering a share up to $1 billion, giving them an initial attachment probability of 3.7%, an initial expected loss of 2.38% and these come with price guidance in a range from 7% to 7.5%.A Class C tranche of notes are sized at $75 million and will provide only named storm per-occurrence protection attaching at $300 million of losses and covering a share up to $500 million, giving them an initial attachment probability of 4.69%, an initial expected loss of 3.76% and these come with price guidance in a range from 9.25% to 9.75%.The final Class D tranche of notes are sized at $50 million and these will provide named storm, severe thunderstorm and winter storm annual aggregate protection attaching at $225 million of losses and covering a share up to $325 million after a franchise deductible of $50 million per-event, giving them an initial attachment probability of 2.92%, an initial expected loss of 1.3% and these come with price guidance in a range from 10.5% to 11.5%, our sources said.

It is good to see the NC Farm Bureau looking to expand and build on its catastrophe bond protection, to embed the capital markets more deeply within its reinsurance tower for 2026 and beyond.As with other catastrophe bond deals in the market in recent weeks, when comparing to previous issues, the pricing is clearly lower compared to the 2023 deal from the same sponsor.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..

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