State Farm

The sponsor was targeting between $850mn-$1.1bn of coverage in the latest mega-bond to hit the ILS market.

The deal will expand the region and perils covered by Merna Re bonds.

The carrier currently has $1.15bn of Merna Re cat bond limit on risk.

Carriers have been dealing with elevated storm activity this year, whilst additional purchases to match inflating values had largely been parked in 2023.

The company wrote the most California homeowners multi-peril insurance, at $2.56bn, and fire lines and home multi-peril insurance, at $2.66bn, in 2022, according to AM Best data.

The new issuances will add to the carrier’s existing $900mn cat bond cover.

The carrier expects to retain about $346mn, net of reinsurance reimbursements.

State Farm policies in question contain a virus exclusion, protecting the insurer from liability.

Nationwide, USAA and Allstate are other national carriers with significant property catastrophe market shares in the states.

This will have implications for Allstate, State Farm, USAA and other insurers which have sued the utility over Camp Fire losses.

The placement should keep the insurer’s bond total at $900mn.

The utility expects to source enough cash to finance its ongoing operations.