- USD 400 million catastrophe bond provides protection against named storms, earthquakes, severe weather and fire in the United States
- Class A notes incorporate drop-down mechanism allowing the notes to act as reinstatement coverage to Farmers’ traditional reinsurance programme
Zurich (Dec. 31, 2025) – Swiss Re Capital Markets successfully closed the USD 400 million Series 2025-1 Principal At-Risk Variable Rate Notes transaction issued by Topanga Re Ltd. on behalf of the companies comprising the Farmers Insurance Group (“Farmers”). The transaction represents the second issuance to be completed by Farmers® and provides collateralised reinsurance protection against named storms, earthquakes, severe weather and fire that affect the United States.
Swiss Re Capital Markets acted as the joint structuring agent and joint bookrunner.
This is Farmers’ largest catastrophe bond transaction consisting of two classes of principal at-risk variable rate notes issued by Topanga Re Ltd., a special purpose vehicle incorporated in Bermuda (the “Issuer”). Through the issuance, Farmers secured USD 400 million of per-occurrence protection across a 4-year risk period on an indemnity basis.
The USD 300 million Class A Notes incorporate an innovative drop-down mechanism within the per occurrence coverage that allows the Class A Notes to act as reinstatement coverage to Farmers’ traditional reinsurance programme in certain third-event scenarios. The transaction again incorporated the 4-year subrogation extension feature to improve the mechanics by which investors are able to benefit from subrogation recoveries, first introduced in Farmers’ inaugural transaction in December 2021.
Jean-Louis Monnier, CEO of Swiss Re Capital Markets Corporation, said: “Swiss Re is proud to have advised Farmers in structuring and placing this innovative catastrophe bond, which demonstrates how the ILS market can act as a complement to traditional reinsurance by providing top and sideways cover. Acceptance of this drop-down mechanic demonstrates investors’ increased sophistication and willingness to support clients like Farmers, allowing the ILS market to better align with traditional reinsurance.”
The Topanga Re Ltd. notes were sold pursuant to Rule 144A of the US Securities Act of 1933, as amended (the “Securities Act”) and have not been registered under the Securities Act or any state securities laws; they may not be offered or sold in the United States except pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act and applicable state securities laws.
About Swiss Re Capital Markets
In the US, securities products and services are offered through Swiss Re Capital Markets Corporation, a registered broker dealer. Swiss Re Capital Markets Corporation is a member of FINRA and SIPC, and is regulated by FINRA. Outside of the US, securities products and services may be offered through Swiss Re Capital Markets Limited or Swiss Re Capital Markets Europe S.A. Swiss Re Capital Markets Limited is authorized and regulated in the UK by the Financial Conduct Authority and is entered in the Financial Services Register. Swiss Re Capital Markets Europe S.A is authorized and supervised in Luxembourg by the Commission de Surveillance du Secteur Financier and the Commissariat aux Assurances and benefits from a passport into certain Member States of the European Union pursuant to the Markets in Financial Instruments Directive 2014/65/EU (“MiFID II”). Swiss Re Capital Markets Corporation, Swiss Re Capital Markets Limited and Swiss Re Capital Markets Europe S.A, together “Swiss Re Capital Markets”, are wholly owned subsidiaries of Swiss Re Ltd.
About Swiss Re
The Swiss Re Group is one of the world’s leading providers of reinsurance, insurance and other forms of insurance-based risk transfer, working to make the world more resilient. It anticipates and manages risk – from natural catastrophes to climate change, from ageing populations to cyber crime. The aim of the Swiss Re Group is to enable society to thrive and progress, creating new opportunities and solutions for its clients. Headquartered in Zurich, Switzerland, where it was founded in 1863, the Swiss Re Group operates through a network of around 70 offices globally. For more information, please visit www.swissre.com.
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SOURCE: Swiss Re
Tags: Catastrophe, Farmers Insurance, Natural Catastrophes, severe weather, Swiss Re, United States (USA)
