MAPFRE RE Secures €125 Million in Its Return to the Catastrophe Bond Market

MAPFRE RE has returned to the catastrophe bond market by sponsoring a new issuance worth €125 million with a three-year term, through the Irish based SPV, Recoletos Re DAC. 

The main objective is to protect its risk portfolio in Europe against extreme wind events, the company’s main catastrophic exposure in the region.

This is the second time MAPFRE RE has utilised this type of financial instrument as part of its retrocession purchase. This 2025 transaction, which follows MAPFRE RE’s inaugural catastrophe bond purchase in 2024, is structured to deliver protection on an annual aggregate basis, with the trigger based on losses as reported by PERILS AG.

AON Securities acted as structuring and placement agent for the transaction. The issuance was very well received by the capital markets, allowing the final amount to increase from the initially planned €100 million to €125 million, as well as achieving a final price below the initial guidance given the strong investor demand.

“We are very pleased with this new protection,” explains Miguel Rosa, CEO of MAPFRE RE. “The use of catastrophe bonds as part of our retrocession purchase allows us to better protect MAPFRE RE in Europe and diversify our reinsurance sources. 

“This strengthens our position in the global market whilst demonstrating the confidence that both the traditional and catastrophe bond markets have in MAPFRE RE’s underwriting quality.” 

Catastrophe bonds are an additional and complementary alternative to traditional reinsurance protections. They allow insurers and reinsurers to transfer part of their risks to the capital markets, offering investors the opportunity to access a diversified asset class with attractive returns, without the need to create their own insurance company.