Farmers Insurance Boosts Reinsurance with $400M Catastrophe Bond

Farmers Insurance Group has successfully completed a $400 million catastrophe bond issuance through Topanga Re Ltd., significantly boosting its reinsurance program with indemnity-based coverage. This strategic initiative aims to complement Farmers' existing catastrophe reinsurance efforts, providing robust and diversified risk management solutions.

Topanga Re issued $300 million in Series 2025-1 Class A Notes and an additional $100 million in Class B Notes, with both offerings supplying four-year per-occurrence and indemnity-trigger protection. These notes provide coverage for U.S-based named storms, earthquakes, severe weather, and fire incidents.

The collaboration with Swiss Re Capital Markets and Howden Capital Markets & Advisory, acting as structuring agents and bookrunners, highlights the importance of the Insurance Linked Securities (ILS) market in supplementing traditional reinsurance frameworks. The notes are issued under Rule 144A of the US Securities Act of 1933, targeting sophisticated investors outside the public domain, thereby enhancing Farmers' portfolio risk management.

This transaction reaffirms Farmers Insurance's dedication to utilizing capital markets to bolster its catastrophe bond market presence and ensure regulatory compliance with operational stability. As carrier entities seek innovative underwriting approaches, Farmers' strategic move exemplifies a commitment to resilient and comprehensive reinsurance solutions within the industry.