State Farm
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The sponsor was targeting between $850mn-$1.1bn of coverage in the latest mega-bond to hit the ILS market.
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The deal will expand the region and perils covered by Merna Re bonds.
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The carrier currently has $1.15bn of Merna Re cat bond limit on risk.
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Carriers have been dealing with elevated storm activity this year, whilst additional purchases to match inflating values had largely been parked in 2023.
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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.
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The new issuances will add to the carrier’s existing $900mn cat bond cover.
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The carrier expects to retain about $346mn, net of reinsurance reimbursements.
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State Farm policies in question contain a virus exclusion, protecting the insurer from liability.
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Nationwide, USAA and Allstate are other national carriers with significant property catastrophe market shares in the states.
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This will have implications for Allstate, State Farm, USAA and other insurers which have sued the utility over Camp Fire losses.
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The placement should keep the insurer’s bond total at $900mn.
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The utility expects to source enough cash to finance its ongoing operations.
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