State Farm Establishes New Merna Re Structure in Bermuda for Potential Cat Bond Issuance US insurance giant State Farm has registered a new corporate structure in Bermuda under the Merna Re framework, signaling its potential return to the capital markets for reinsurance through catastrophe bonds. The insurer, which has utilized catastrophe bonds since 2000, is likely preparing to issue additional reinsurance coverage via this newly established entity. Currently, State Farm has $3 billion in outstanding reinsurance protection backed by cat bonds, according to Artemis’ catastrophe bond sponsor leaderboard. The insurer last participated in the cat bond market with issuances that settled in May 2025, securing a record $1.55 billion in multi-year reinsurance. This marked the largest single issuance from the cat bond market in State Farm’s history. The latest development involves the registration of Merna Re Enterprise II Ltd. in Bermuda, though it has not yet received a license. The name strongly suggests this structure is tied to State Farm and is intended for future catastrophe bond offerings. Given the insurer’s historical pattern of issuing cat bonds in March through June each year since 2013, a 2026 issuance appears likely. The newly registered entity may serve as the platform for such a move. State Farm’s existing cat bond obligations include $450 million in coverage maturing in July 2026, $250 million in earthquake and named storm protection from the Merna Re II Ltd. (Series 2023-1) issuance, and $200 million in Texas named storm coverage from the Merna Re II Ltd. (Series 2023-2) bond. The insurer may seek to replace or expand this coverage in 2026, potentially using the new Merna Re Enterprise II Ltd. structure. Artemis will provide updates if new Merna Re-named cat bonds appear in the market.#state_farm #merna_re #bermuda #artemis #cat_bonds
