TD Insurance sponsored a new C$150 mn catastrophe bond to secure multi-year reinsurance capacity for earthquake and severe convective storm protection in Canada.
The proceeds are invested in Canadian dollar-denominated notes from the European Bank for Reconstruction and Development, the insurer said.
Issued by MMIFS Re Ltd., the Series 2025-1 cat bond provides indemnity and per-occurrence coverage for three years, from Jan. 17, 2025, to Dec. 31, 2027.
TD Insurance stated it is the first Canadian insurer to sponsor a bond focused exclusively on catastrophe risks in Canada, where such events are rising. The Insurance Bureau of Canada reported that 2024 was the country’s worst year for insured losses from severe weather.
This transaction allows Canadian cedents to underwrite natural catastrophe risk with greater confidence while protecting policyholders. It marks a key milestone in Canada’s reinsurance market
Peter Askew, president and CEO of reinsurance broker Guy Carpenter Canada
TD Insurance received advisory support from joint bookrunners GC Securities, the capital markets and insurance-linked securities unit of Guy Carpenter, and TD Securities. GC Securities also served as sole structuring agent.
Insured catastrophe losses in Canada reached a record C$8.5 bn in 2024, nearly tripling the prior year’s total and standing 12 times higher than the annual average of C$701 mn recorded in the first decade of the 21st century. This data comes from Catastrophe Indices and Quantification and the Insurance Bureau of Canada. Beinsure has highlighted the key insights from the IBC report.
Since 2020, five of the eight largest annual loss years for Canadian insurers have occurred. Losses in 2024, driven by nine major events, surpassed the C$6 bn record set in 2016 during the Fort McMurray wildfires.
Four events during the summer accounted for C$7.12 bn of the year’s total losses. These included unprecedented rain and flooding in Toronto and Montreal, along with wildfire and hail in Alberta.
