Mercury Insurance has now recovered $20.05 million from its private catastrophe bond transaction, after losses from the January 2025 wildfires in California exceeded the attachment and eroded some of its principal, Artemis has learned.Mercury had sponsored four private catastrophe bonds under the Randolph Re name to provide it with fully-collateralized wildfire reinsurance protection covering events in its home state of California.The company secured $45.5 million of reinsurance from the last of those private cat bonds, the issuance that came to market in July 2024 for Mercury.Recall that, Mercury had that the January 2025 Palisades and Eaton wildfires in California had resulted in significant losses for the company.

When the insurer , it revealed a $414 million pre-tax net catastrophe loss from the wildfires, against a $2.15 billion gross loss, with $1.294 billion expected to be recovered from its reinsurance arrangements.The Randolph Re 2024-1 private catastrophe bond arrangement was marked down heavily right after the wildfires occurred and its price has remained depressed ever since.Now, sources have told us that the Randolph Re 2024-1 cat bond had its principal reduced, from the initial $45.5 million, to now stand at $25.45 million by the latest pricing sheets in July.

We understand that is due to a reinsurance recovery being made, as losses exceeded the cat bond’s attachment point and Mercury recouped some $20.05 million of principal from the deal.The remaining $25.25 million of principal is now said to be marked for bids of 5 and offers of 15, at this time.The recovery appears to have made around the end of the risk period of the Randolph Re 2024-1 cat bond notes, which was July 7th 2025.

The remaining notes are now likely to face an extension of maturity, to allow for any development of losses and further reinsurance recoveries to come due.It’s still not clear where exactly the private cat bond sat in Mercury’s reinsurance tower, but we understand it was relatively high up in attachment terms.Recall that, that will cover it for wildfire and fire-following earthquake losses in California.

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