Insurer secures second Canadian Cat bond

TD Insurance (TDI) has successfully sponsored its second catastrophe bond, a year after becoming the first Canadian insurer to sponsor a bond solely focused on Cat perils in Canada.

The MMIFS Re Ltd. Series 2026-1 cat bond provides TDI insurance companies additional reinsurance capacity through a multi-year risk transfer of $115 million aggregate protection against named storms, earthquakes, severe convective storms, winter storms and wildfires. The proceeds are invested in Canadian dollar (CAD)-denominated European Bank for Reconstruction and Development (EBRD) notes.

The Series 2026-1 bond will provide protection on an indemnity and annual aggregate basis over a three-year term effective Jan. 9, 2026 through Dec. 31, 2028, TDI says in a Jan. 29 press release.

Announced in early 2025, the first Cat bond (Series 2025-1) provided companies under the TDI banner with $150 million in additional reinsurance capacity to protect against earthquakes and severe convective storms, Canadian Underwriter reported at the time.

TDI companies include Security National Insurance Company, Primmum Insurance Company, TD General Insurance Company, TD Direct Insurance Company, and TD Home and Auto Insurance Company.

The first Cat bond came at a time when catastrophes in 2024 cost Canadian P&C insurers a record-breaking $9.1 billion in insured losses. Even though insured losses were much less in 2025 ($2.4 billion), the costs of severe weather events continues to climb.

“Through this second catastrophe bond, we’re able to help manage rising costs of these events to provide the most competitive pricing possible for our clients,” says James Russell, TDI’s president and CEO.

During a Morningstar DBRS webinar last April, Russell acknowledged there’s a very “infrequent probability” of triggering the Series 2025-1 bond. The bond is triggered at the indemnity level of $2.35 billion in losses, to a cap of $2.5 billion.

“While the likelihood of reaching this level of catastrophe is low due to the expectancy of a catastrophic event of this magnitude occurring, this investment gives us options to diversify our protection sources,” Russell said at the time.

To put it into perspective, last year’s costliest NatCat was the Ontario and Quebec ice storm at about $490 million. Even Canada’s record-breaking 2024 Cat loss year had only two individual events that exceeded $2 billion in insured losses: the Calgary hailstorm (at about $3.25 billion) and remnants of Hurricane Debby ($2.7 billion).

Jason Contant

Jason has been an award-winning journalist with Canadian Underwriter for more than a decade, including the past three years as associate editor and, before that, as digital editor for seven years.