The Massachusetts Property Insurance Underwriting Association (MPIUA) has returned to the catastrophe bond market with an initial target to secure $150 million or more in multi-peril aggregate reinsurance protection through this new Mayflower Re Ltd. (Series 2026-1) issuance, our sources have explained.
The MPIUA was last in the market in 2025, securing $225 million of reinsurance from the offering.
Currently, the residual market insurer has $575 million in cat bond backed reinsurance protection outstanding from its deals. $250 million of that from its 2023 cat bond sponsorship is scheduled to mature in early July.
So it’s encouraging to see the residual market insurer looking to replace at least part of its cat bond backed catastrophe reinsurance protection in 2026.
You can read about all of the MPIUA’s catastrophe bonds in our extensive Deal Directory.
For its 2026-1 catastrophe bond sponsorship, the MPIUA is again using its Bermuda-based special purpose insurance vehicle Mayflower Re Ltd.
We’re told that Mayflower Re will offer investors two tranches of Series 2026-1 notes, each equally sized to provide $75 million of reinsurance protection.
The proceeds from their sale will be used to collateralize a retrocessional reinsurance agreement with global reinsurer Hannover Re, which is acting as the fronting risk transformer for this cat bond and has for other recent MPIUA sponsored deals, in turn providing the catastrophe reinsurance to the sponsor.
This Mayflower Re Series 2026-1 cat bond issuance will provide the MPIUA with a multi-year source of indemnity based and annual aggregate reinsurance over a three-year term and three annual risk periods, running until the end of June 2029, we have learned.
The Series 2026-1 Class A and Class B notes will provide the MPIUA with reinsurance against certain losses from Massachusetts named storms, severe thunderstorms and winter storms, the same range of perils covered by its previous cat bonds.
Also like prior issuances for the MPIUA, an event must breach a $10 million ultimate net loss deductible to qualify for aggregation under the terms of the reinsurance.
A currently $75 million Series 2026-1 Class A tranche of notes will initially cover losses from an attachment point of $850 million, exhausting at $1.3 billion of losses to the MPIUA risk pool.
Which gives the Mayflower Re Series 2026-1 Class A notes an initial attachment probability of 2.196%, an initial base expected loss of 1.788% and they are being marketed to investors with spread price guidance in a range from 4% to 4.5%.
An also currently $75 million Series 2026-1 Class B tranche of notes are riskier, sitting lower down under the A’s, and will initially cover losses from an attachment point of $550 million, exhausting at $850 million of losses to the MPIUA risk pool.
Which gives the Mayflower Re Series 2026-1 Class B notes an initial attachment probability of 3.079%, an initial base expected loss of 2.598% and they are being marketed to investors with spread price guidance in a range from 4.75% to 5.25%.
For comparison and as with all recent cat bonds evidencing a year-on-year decline, last year’s single tranche of Mayflower Re 2025-1 cat bond notes came with an initial expected loss of 0.901% and priced to pay investors 3.5%.
The Massachusetts MPIUA, like other state-focused residual market insurers and wind pools, is another that continues to embed catastrophe bonds more deeply into its reinsurance tower, with this trend continuing to be supportive of overall market growth.
You can read all about this new Mayflower Re Ltd. (Series 2026-1) catastrophe bond and every other cat bond transaction issued since the market began in the Artemis Deal Directory.
