Farmers Insurance Exchange said it has closed a US$400 million catastrophe bond through Topanga Re, adding multi-year, indemnity-based protection that is intended to fit alongside the group’s traditional catastrophe reinsurance program.
The transaction places Farmers Insurance Group, including subsidiaries and affiliates, in a multi-year reinsurance arrangement with Topanga Re that provides indemnity coverage, the company said.
Topanga Re issued two tranches of notes: US$300 million of Series 2025-1 Class A Notes and US$100 million of Series 2025-1 Class B Notes. Both classes provide four years of per-occurrence protection with an indemnity trigger, according to the announcement.
Farmers’ use of Topanga Re fits a broader pattern of insurers turning to collateralized reinsurance in the capital markets, alongside traditional reinsurance placements. Moody’s reported alternative reinsurance capital of about US$121 billion as of June 30, with catastrophe bonds accounting for roughly 45% of that total.
The coverage applies to US named storms, earthquakes, severe weather and fire, the company said. Farmers said the bond is designed to integrate into its existing catastrophe reinsurance program.
The inclusion of fire alongside other peak perils reflects how some sponsors have been broadening cat bond menus in 2025. Ariel Re, for example, said its Titania Re 2025-1 issuance marked the first time it added wildfire risk to its catastrophe bond program.
“Farmers is pleased to access the capital markets via this catastrophe bond issuance which allows us to diversify our capital sources and manage risk,” said Thomas Noh (pictured above), chief financial officer of Farmers Insurance Exchange. “Obtaining multi-year collateralized capacity through Topanga Re is an important component of our risk management strategy.”
Swiss Re Capital Markets CEO Jean-Louis Monnier said the deal reflects the use of insurance-linked securities as a complement to traditional reinsurance and pointed to the “drop-down mechanic” as part of the structure.
“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,” Monnier said.
