Farmers Insurance Exchange and its subsidiaries and affiliates (collectively, Farmers Insurance Group) have issued $400 million in catastrophe bonds to provide indemnity-based insurance to complement its traditional catastrophe reinsurance program.
Swiss Re Capital Markets and Howden Capital Markets & Advisory (HCMA) acted as joint structuring agents and joint bookrunners for the catastrophe bonds, which were completed through Topanga Re.
Farmers explained that as part of the offering, Topanga Re issued two tranches of notes: $300 million of Series 2025-1 Class A Notes and $100 million of Series 2025-1 Class B Notes.
Both the Class A and Class B notes reportedly offer four years of per-occurrence coverage with indemnity triggers.
Both categories provide protection against U.S. storm, earthquake, severe weather and fire hazards.
Thomas Noh, Chief Financial Officer of Farmers Insurance Exchange, commented: “Farmers is pleased to enter the capital markets through the issuance of catastrophe bonds, which allows us to diversify our capital sources and manage risk.
“Access to multi-year collateralization capabilities through Topanga Re is an important part of our risk management strategy.”
Jean-Louis Monnier, CEO of Swiss Re Capital Markets, said: “Swiss Re is proud to have advised Farmers on the structuring and issuance of this innovative cat bond, which demonstrates how the ILS market can complement traditional reinsurance by providing top and side protection.
“Acceptance of this pull-down mechanism demonstrates the growing sophistication of investors and their willingness to support customers such as 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 proud to help Farmers structure and issue its second and largest catastrophe bond to date through the Topanga Re instrument.
“This transaction has attracted strong support from a broad base of investors with efficient pricing and provides Farmers with comprehensive coverage covering a wide range of risks. This issuance underscores Farmers’ commitment to maintaining its position as a leading and stable originator in the catastrophe bond market.”
You can read more about Topanga Re Ltd. (Series 2025-1) Cat Bonds, as well as all other bonds, in our sister publication Artemis’ comprehensive deal directory.