California Earthquake Authority seeks $600m reinsurance with Ursa Re 2026-1 cat bond

The California Earthquake Authority (CEA) has returned to the catastrophe bond market for its second sponsorship of this year, with an initial target to secure $600 million of fully-collateralized earthquake reinsurance from a new Ursa Re Ltd. (Series 2026-1) issuance, Artemis can report.

In 2025, the California Earthquake Authority (CEA) sponsored issuance of three series of catastrophe bonds, securing $1.57 billion of earthquake reinsurance protection from the cat bond market.

For 2026, the CEA first returned in June and secured $425 million of earthquake reinsurance from the capital markets through a Sutter Re Ltd. (Series 2026-1) deal.

Now, the earthquake specialist insurer in California is back and from the start looking for a larger $600 million of protection with this new Ursa Re 2026-1 cat bond, we have learned.

The CEA has $2.875 billion of outstanding catastrophe bond coverage still in-force at this time and currently sits in 4th place in our cat bond sponsors leaderboard.

When we last reported on the CEA’s reinsurance risk transfer tower, the earthquake insurer had limit of just over $8.2 billion in-force at the end of April 2026, with the catastrophe bond market providing around 35% of that total.

This new Ursa Re 2026-1 cat bond will become the 25th visit to the market we have tracked by the California Earthquake Authority (CEA).

View details of every catastrophe bond sponsored by the CEA in the Artemis Deal Directory.

For this new cat bond issuance, we have been told that the CEA will use its Ursa Re Ltd. special purpose insurer (SPI) which is based in Bermuda and is targeting issuance of two tranches of Series 2026-1 catastrophe bond notes.

These notes are being offered to cat bond investors and the proceeds of their sale will be used to collateralize reinsurance agreements between the issuing vehicle Ursa Re Ltd. and the CEA.

The initial target is to secure $600 million of limit across the two tranches of cat bond notes on offer, which will provide the CEA with a roughly four year source of fully-collateralized California earthquake reinsurance protection on an indemnity trigger and annual aggregate basis, the same trigger structure as CEA’s cat bonds have adopted in the past.

Ursa Re Ltd. is offering a currently $350 million Series 2026-1 Class D tranche of notes that would attach their coverage at $4.784 billion of losses and share losses across a $500 million layer, giving them an initial attachment probability of 2.83%, an initial expected loss of 2.68% and they are being offered to investors with price guidance in a range from 4% to 4.5%, we are told.

In addition, a riskier currently $250 million Series 2026-1 Class H tranche of notes are being offered that would attach their coverage at $1.5 billion of losses, sharing in a $400 million layer, giving them an initial attachment probability of 6.85%, an initial expected loss of 6.35% and these notes are being offered to investors with price guidance in a range from 8.5% to 9.5%, sources explained.

Interestingly, we believe those Class H notes have the highest expected loss for any tranche of catastrophe bond notes that we have seen sponsored by the CEA over the years.

It perhaps shows the CEA looking to bring the catastrophe bond market into some of the lower layers of its reinsurance towers, perhaps in response to the opportunity presented by the strong and efficient price execution that sponsors of cat bonds are benefiting from at this time.

At a $600 million initial target size this new Ursa Re 2026-1 catastrophe bond would already be among the largest sponsored by the CEA, in the top five series of cat bond notes it has sponsored over the years. So it will be interesting to see whether it can upsize, as well as how the market responds to the riskier, lower-layer tranche of notes.

You can read all about this new Ursa Re Ltd. (Series 2026-1) catastrophe bond from the California Earthquake Authority (CEA) and every other cat bond ever issued in the extensive Artemis Deal Directory.