Wildfire cat bond news

The California FAIR Plan Association is aiming to upsize its debut catastrophe bond, with the target size now raised to secure between $350 million and $500 million in wildfire reinsurance protection through the Golden Bear Re Ltd. (Series 2026-1) cat bond issuance, Artemis has learned.

As catastrophe risk models for assessing wildfires continue to advance, and as the industry experiences ongoing refinements in pricing and coverage through lessons learned from each new fire season, wildfire catastrophe bonds are anticipated to persist as a permanent and growing feature of the cat bond market, according to Acrisure Re.

The California FAIR Plan Association is sponsoring its first catastrophe bond, with an initial target to secure $250 million or greater in capital markets backed wildfire reinsurance protection through a Golden Bear Re Ltd. (Series 2026-1) cat bond issuance, Artemis has learned.

The catastrophe bond market has shown increasing confidence in assuming wildfire risk even after the major disaster that struck the Los Angeles region of California at the start of this year, with already over $3.375 billion of cat bonds issued in 2025 that have an exposure to the wildfire peril.

Mercury General Corporation, the California headquartered insurer, has now successfully priced its first 144A catastrophe bond, securing the 50% upsized $150 million in reinsurance protection from the capital markets with the Luca Re Ltd. (Series 2025-1) issuance that will cover it for wildfire and fire-following earthquake losses in its home state, Artemis can report.

Mercury General Corporation, the California headquartered insurer, is aiming to upsize its debut 144A catastrophe bond market, raising the target to secure as much as $150 million in reinsurance from the Luca Re Ltd. (Series 2025-1) issuance to cover wildfire and fire-following earthquake losses in its home state, Artemis can report.

Mercury General Corporation, the California headquartered insurer, has entered the 144A catastrophe bond market for the first time, seeking $100 million or more in reinsurance from the capital markets with a Luca Re Ltd. (Series 2025-1) issuance that will cover it for wildfire and fire-following earthquake losses in its home state, Artemis has learned.

According to reports, the US state of Colorado is exploring whether catastrophe bonds may be a suitable risk transfer mechanism to help it deal with growing wildfire related risks and address insurance affordability.

In time, as wildfire risk models advance and the market becomes more accepting of them, Guy Carpenter executives suggest investor confidence may increase, resulting in a growing willingness to deploy ILS capital to support the California market’s need for wildfire protection.

For now a third year in a row, the California Wildfire Fund is going without reinsurance or any form of risk transfer in 2022, as the market pricing on offer still does not meet the Fund’s goal of extending its durability.