Merna Re Enterprise Ltd. (Series 2025-4)

State Farm returned to the catastrophe bond market in 2025 and secured the largest amount of reinsurance limit through a single visit to the cat bond market spread across multiple series of notes, with $1.55 billion of protection secured via four Merna Re Series 2025 cat bonds.

At $1.55 billion, this new Merna Re Series 2025 catastrophe bond sponsorship takes the record as the largest ever seen, narrowly beating a recent $1.525 billion cat bond sponsorship from Florida Citizens.

For 2025, State Farm again used its Merna Re II Ltd. special purpose insurer based in Bermuda for part of this record sized catastrophe bond sponsorship, with two series issued under this program. The company also utilised two new Bermuda SPI’s for  the other two series of notes, one coming under each of Merna Re Companywide Ltd. and Merna Re Enterprise Ltd.

Four series of notes have been issued and sold to investors, together securing the $1.55 billion of fully-collateralized reinsurance limit for State Farm.

Merna Re II Ltd. will issue two series and tranches of notes today as the deal settles, with Merna Re Companywide Ltd. and Merna Re Enterprise Ltd. each issuing one as well, with the notes having been sold to cat bond investors and the proceeds used to collateralize reinsurance agreements that will protect State Farm.

In total, the new Merna Re 2025 cat bonds will provide State Farm with a $1.55 billion source of multi-peril indemnity reinsurance protection over a term running to the end of June 2028 and maturity due July 7th 2028 for each of the series of notes.

State Farm’s record visit to the catastrophe bond market is broken down into four series of notes, as follows:

• $200 million – Merna Re II Ltd. (Series 2025-1)
• $300 million – Merna Re II Ltd. (Series 2025-2)
• $500 million – Merna Re Companywide Ltd. (Series 2025-3)
• $550 million – Merna Re Enterprise Ltd. (Series 2025-4) – details on this page

The details below are about the last of those four series.

Merna Re Enterprise Ltd. (Series 2025-4)

The fourth series of cat bond notes issued as part of State Farm’s record visit to the market came under the recently registered Merna Re Enterprise Ltd. special purpose insurer (SPI) and are a $550 million Series 2025-4 issuance.

This series of notes are a frequency cover, designed to provide State Farm with annual aggregate reinsurance protection for multiple perils across most of the United States.

The Merna Re Enterprise 2025-4 cat bond notes will provide a $550 million roughly three year source of collateralized aggregate reinsurance protection.

We are told these notes will provide State Farm with annual aggregate reinsurance protection covering certain losses from US, DC (excl. CA) windstorm, hail, tornado, hurricane, tropical cyclone, earthquake, and winter storm events.

We understand there are qualifying thresholds in place, so deductibles or per-event retentions, but we do not have specific details of those.

The reinsurance coverage from the Series 2025-4 notes will be on an indemnity trigger and annual aggregate basis over the term.

We are told that the $550 million of Series 2025-4 notes issued by Merna Re Enterprise Ltd. come with an initial expected loss of 1.92% and they priced to pay investors a spread of 7.75%.

As is typical with all of State Farm’s catastrophe bonds under the Merna Reinsurance series of structures in recent years, we understand that Aon Securities has structured the deal and acted as bookrunner.

State Farm’s Merna Re, or Merna Reinsurance, catastrophe bonds have all tended to be Rule 144A issues but relatively privately placed under a closed subscription group for a number of years now.