The catastrophe bond asset class is used to tossing around big ideas that manage risk from huge storms. A planned $4 billion transaction from State Farm Mutual Automobile Insurance Co., however, might be the largest transaction that the sector has ever produced.

Aon Capital Markets, the underwriter, was said to be marketing the deal at press time, according to market sources. The transaction uses the capital markets to manage a portion of State Farm's risk of natural catastrophe losses in the U.S. and Canada, including hurricane, earthquake, tornado, hail, winter storms and brush fire, according to Fitch Ratings, which gave the notes triple-A through single-B ratings.

Subscribe Now

Access to a full range of industry content, analysis and expert commentary.

30-Day Free Trial

No credit card required. Access coverage of the securitization marketplace, including breaking news updated throughout the day.