Catastrophe Bond Market Shatters Records in 2025

The catastrophe bond and insurance-linked securities market achieved unprecedented milestones in 2025, with record new issuance of $25.6 billion pushing the outstanding market to $61.3 billion—a testament to growing appetite among insurers and investors alike, according to analysis by Artemis.

The 2025 market broke nearly every headline record in its history, Artemis said. Annual issuance climbed 45% year-over-year and surpassed $20 billion for the first time, while the number of transactions reached 122—exceeding 100 deals in a single year for the first time. The fourth quarter alone generated more than $7 billion across 27 transactions, marking the fifth-largest quarter on record.

Beyond the volume surge, the market experienced meaningful structural expansion, the Artemis report said. The number of new sponsors entering the market reached 15 in 2025, another annual record, as insurers and reinsurers increasingly relied on capital markets to support reinsurance and retrocession strategies. Traditional 144A property catastrophe bonds dominated activity, reaching a record $23.9 billion for the year, while total 144A issuance—including non-catastrophe risks like cyber—climbed to $25 billion.

Late in the year, issuance accelerated dramatically, pr the report. After a quiet October that generated just $255 million, momentum built sharply once the Atlantic hurricane season ended. November and December each set monthly records, with December posting $4.9 billion—the second-largest month in market history.

Diversifying Risk Landscapes and New Market Entrants

The composition of CAT bond issuance expanded beyond traditional property risks. Cyber insurance securitizations returned to prominence, with Beazley sponsoring the largest cyber deal ever at $300 million and Chubb issuing a $150 million companion transaction, according to the report.

First-time sponsors also brought novel exposures to market: the California FAIR Plan issued the largest wildfire deal ever at $750 million, while Israeli insurer Migdal Insurance introduced earthquake risk from that region, Artemis noted.

Geographic diversification accompanied this risk expansion. Beyond the dominant U.S. market, which accounted for 58% of Q4 issuance, sponsors brought capital to cover exposures in Australia, New Zealand, Canada, and the Caribbean, along with European windstorm and hail risks across France, Spain, and other continental markets.

Sustained Momentum Amid Market Evolution

The market’s trajectory signals durable structural support from both capital providers and risk transferors, according to the report.

The outstanding market for 144A property catastrophe bonds reached $57 billion at year-end, while the combined 144A market surpassed $60.7 billion for the first time. Over a nine-year period, the total market expanded 134% from its size at the end of 2016, reflecting fundamental shifts in how the insurance industry accesses alternative capital.

The softening pricing environment—moving down from elevated 2023 peaks—continues to attract sponsors seeking cost-effective reinsurance alternatives, while persistent investor demand reflects the asset class’s appeal to diversified portfolios. With 15 new sponsors entering the market and premium transaction sizes averaging $259.6 million in the fourth quarter, the infrastructure supporting catastrophe bond issuance shows few signs of cooling, Artemis said.

Obtain the report here. &