The Massachusetts Property Insurance Underwriting Association (MPIUA) is back in the catastrophe bond market with an initial target to secure $150 million or more in multi-peril reinsurance protection from the capital markets through a new issuance, Artemis has learned.This new Mayflower Re 2025-1 issuance will become the sixth catastrophe bond sponsored by the Massachusetts Property Insurance Underwriting Association (MPIUA), a residual market property insurance association or FAIR Plan for the Commonwealth of Massachusetts.The MPIUA was last in the market in 2023 and 2024 with currently $350 million in cat bond risk capital outstanding from its deals, none of which is scheduled to mature this year.So it’s good to see the residual market insurer continuing to build on its cat bond backed catastrophe reinsurance protection in 2025.

.The MPIUA is again using its Bermuda-based vehicle Mayflower Re Ltd.for this 2025 catastrophe bond.

We’re told the issuance will feature a single currently $150 million tranche of Class A Series 2025-1 notes that will be sold to investors.The proceeds from that sale will be used to collateralize a retrocessional reinsurance agreement with global reinsurer Hannover Re, which is acting as the fronting risk transformer for this cat bond and will in turn provide the catastrophe reinsurance to the MPIUA.This Mayflower Re Series 2025-1 cat bond will provide the MPIUA with a multi-year source of indemnity based and annual aggregate reinsurance over a three-year term, running until the end of June 2028, sources have told us.

The currently $150 million tranche of Series 2025-1 Class A notes will cover the MPIUA against certain losses from Massachusetts named storms, severe thunderstorms and winter storms, the same range of perils covered by previous cat bonds that benefited the insurer.As with prior issuances for the MPIUA, an event must breach a $10 million ultimate net loss deductible to qualify for aggregation, we understand.The Class A tranche of notes have a preliminary size of $150 million and would initially cover losses from an attachment point of $1.75 billion, exhausting at $2.35 billion of losses to the MPIUA risk pool.

As a result, the Mayflower Re Series 2025-1 Class A notes will come with an initial attachment probability of 1.052%, an initial base expected loss of 0.901% and these notes are being marketed to investors with spread price guidance in a range from 3.25% to 3.75%.For comparison, the Mayflower Re 2024 cat bond notes had an initial expected loss of 1.059% and priced for a spread of 4.5%, while the Mayflower Re 2023 cat bond notes had an initial expected loss of 1.084% and also priced to pay investors a spread of 4.5%.So pricing is certainly down with this 2025 issuance, based on the current guidance, but only aligned with the rest of the catastrophe bond market it seems.

Like other state focused residual market insurers the Massachusetts MPIUA is another that continues to embed catastrophe bonds more deeply into its reinsurance tower, a trend that continues to be supportive of market growth.You can read all about this new catastrophe bond and every other cat bond transaction issued since the market began 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.