Farmers issues cat bond through Bermuda SPI

24-12-2021

US insurer Farmers Insurance Exchange, part of the Farmers Insurance Group, has completed a $160 million 144A catastrophe bond through Bermuda special purpose insurer Topanga Re. The million multi-year, multi-peril cat bond provides indemnity based coverage to the California-headquartered insurer.

The cat bond will integrate into the existing traditional catastrophe reinsurance program for Farmers, which along with other insurers in the Farmers group, provides auto, homeowner, personal umbrella and business owners insurance. 

Topanga Re issued two tranches of notes as part of the offering, $100 million of Series 2021-1 Class A Notes and $60 million of Series 2021-1 Class B Notes. The Class A Notes offer four years of per-occurrence protection and the Class B Notes offer two years of annual aggregate protection. Both classes protect against US named storms, earthquakes, severe weather and fire.

"Farmers is pleased to access the capital markets via this catastrophe bond issuance which allows us to diversify our capital sources by distributing different levels of risk," said Thomas Noh, chief financial officer of Farmers Insurance Exchange. "Obtaining multi-year collateralized capacity from Topanga Re is an important addition to our risk management strategy."

Swiss Re Capital Markets and TigerRisk Capital Markets & Advisory acted as joint structuring agents. Swiss Re Capital Markets acted as sole bookrunner and TigerRisk Capital Markets & Advisory as co-manager.

Farmers Insurance, Topanga Re, Swiss Re, Cat Bonds, Catastrophe, Insurance, Reinsurance, Thomas Noh, North America

Bermuda Re