State Farm
-
The cat bond limit total is an uplift of around 60% on the carrier’s 2024 bonds. -
The mega cat bond season in Q2 last year recorded issuance of $8.2bn.
-
Commissioner Lara also proposed a $500mn cash infusion from parent State Farm.
-
State Farm General has asked California regulators for an emergency rate increase.
-
The carrier has paid $1.75bn on around 9,500 claims filed from the wildfires.
-
The insurer disclosed the estimates as it seeks emergency rate hikes from regulators.
-
The company says the recent wildfires will be the costliest in its history.
-
A negative January return will be unprecedented for ILS industry.
-
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.
-
USAA is among the top 10 carriers with exposure to the loss and has already eroded aggregate deductibles for the current year of cover after this year’s hurricane season.
