Farmers Insurance Exchange and its subsidiaries and affiliates, collectively known as the Farmers Insurance Group, have closed a $400 million catastrophe bond, providing indemnity-based coverage that complements their traditional catastrophe reinsurance program.
Farmers explained that Topanga Re issued two tranches of notes as part of the offering: $300 million of Series 2025-1 Class A Notes and $100 million of Series 2025-1 Class B Notes.
The Class A and Class B Notes reportedly each provide four years of per-occurrence coverage with an indemnity trigger.
Both Classes provide protection against the perils of U.S. named storms, earthquakes, severe weather and fire.
Thomas Noh, Chief Financial Officer of Farmers Insurance Exchange, commented, “Farmers is pleased to access the capital markets via this catastrophe bond issuance, which allows us to diversify our capital sources and manage risk.
“Obtaining multi-year collateralised capacity through Topanga Re is an important component of our risk management strategy.”
Jean-Louis Monnier, CEO of Swiss Re Capital Markets, said, “Swiss Re is proud to have advised Farmers in structuring and placing this innovative catastrophe bond, which demonstrates how the ILS market can act as a complement to traditional reinsurance by providing top and sideways cover.
“Acceptance of this drop-down mechanic demonstrates investors’ increased sophistication and willingness to support clients like Farmers, allowing the ILS market to better align with traditional reinsurance.”
Philipp Kusche, Co-Head of Global ILS and Chairman of HCMA Europe, added, “HCMA is honoured to have assisted Farmers in structuring and placing its second—and largest—catastrophe bond issuance to date through the Topanga Re vehicle.
“The transaction attracted strong support from a broad base of investors at efficient pricing and provides Farmers with comprehensive coverage across a wide range of perils. This issuance underscores Farmers’ commitment to maintaining its position as a leading and consistent sponsor in the catastrophe bond market.”
You can read more about this Topanga Re Ltd. (Series 2025-1) catastrophe bond, and all others, in the comprehensive Deal Directory of our sister publication, Artemis.
About the Author
