Progressive, the US insurance company, has raised its target for reinsurance protection from its latest catastrophe bond, with the Bonanza Re Ltd. (Series 2025-1) issuance now seeking $100 million of aggregate reinsurance for the insurer, Artemis has learned.
Progressive returned to the cat bond market in November, with an initial target to secure a $70 million or more one-year source of annual aggregate and multi-peril reinsurance protection from the capital markets.
We’re now told that target has been raised, with the single tranche of discounted zero-coupon notes now seeking $100 million of protection for the insurer.
At the same time the price guidance for the notes has been lowered, as Progressive also targets stronger execution for its latest Bonanza Re catastrophe bond sponsorship, which will become the ninth in the Bonanza Re series of cat bond deals.
The now $100 million of Series 2025-1 Class A discount zero-coupon cat bond notes that Bonanza Re Ltd. is offering will provide Progressive and certain underwriting subsidiaries with a one year source of aggregate reinsurance covering qualifying losses from the perils of named storm, earthquake (fire-following only), severe thunderstorm, winter storm and wildfire across the United States, running across calendar year 2026.
The now upsized to $100 million of Series 2025-1 Class A notes from Bonanza Re Ltd. come with an initial expected loss of 5.53% and were first offered with price guidance in a range from 80% to 82% of par (being zero-coupon in nature),
Now, we’re told the notes have updated price guidance in a range from 82% to 84% of par, indicating Progressive is targeting stronger pricing execution for its latest cat bond deal.
With a $70 million aggregate tranche of Progressive’s Bonanza Re Ltd. (Series 2024-1) cat bond issuance set to mature soon, it now looks like this new 2025-1 issuance will grow the insurer’s aggregate reinsurance from the capital markets given the larger target size at $100 million.
Recall that, Progressive added a novel parametric severe convective storm aggregate reinsurance arrangement this year at its traditional reinsurance renewal, to provide responsive aggregate protection for qualifying thunderstorm, hail and tornado loss events.
You can read all about this Bonanza Re Ltd. (Series 2025-1) catastrophe bond and every other cat bond ever issued in the Artemis Deal Directory.
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