MAPFRE RE has returned to the catastrophe bond market with a €125 million issuance arranged through the Irish special purpose vehicle Recoletos Re DAC.
The three-year bond is intended to provide protection for the company’s European risk portfolio against severe wind events, which remain its largest catastrophic exposure in the region.
This marks MAPFRE RE’s second use of a catastrophe bond as part of its broader retrocession strategy. The 2025 issuance follows the firm’s first transaction in 2024 and is structured to provide annual aggregate protection, with losses measured through data reported by PERILS AG.
The transaction drew enough investor interest to raise the size of the issuance from the originally planned €100 million to €125 million. MAPFRE RE said the demand also resulted in a final price below initial marketing levels.
The transaction comes at a time when the catastrophe bond market is experiencing rapid expansion. Moody’s data shows that global issuance had already reached about US $18.4 billion by late August , surpassing the previous annual record and signaling broad participation from capital market investors.
“We are very pleased with this new protection,” CEO Miguel Rosa (pictured above) said, noting that catastrophe bonds provide another source of coverage for the company’s European risk portfolio. Rosa said the instrument allows MAPFRE RE “to better protect MAPFRE RE in Europe and diversify our reinsurance sources,” adding that investor confidence supported the final execution.
Investor performance has helped drive the demand. Over the 12 months ending June 2025, catastrophe bonds returned 14.1% according to the Aon Securities Catastrophe Bond Total Return Index. Those returns have continued to draw institutions seeking uncorrelated yield, contributing to the liquidity that has supported transactions.
MAPFRE RE said catastrophe bonds remain a complementary tool alongside traditional reinsurance.
The timing of the issuance also reflects shifts in the traditional reinsurance market. AM Best reported risk-adjusted property catastrophe rates declined roughly 10% at the mid-2025 renewals. As prices soften, several sponsors have expanded their use of alternative capital to balance capacity sources.
