During an interview, executives at Howden Capital Markets & Advisory outlined how the catastrophe bond market has evolved into a well-established asset class that helps strengthen systemic resilience for public and private entities, while also acknowledging how private ILS continues to present attractive opportunities for cedants and investors heading into 1.1 and beyond.
2025 has been a landmark year for the catastrophe bond market, and it will set a high benchmark for annual issuance for future years to try and beat.
At this time of writing, cat bond issuance across 144A and private deals currently sits at $24.8 billion, but a number of new issuances are still expected to settle before the end of the year, which means that the year-end figure will be meaningfully higher.
Reflecting on this substantial momentum, Kusche said that the cat bond market is entering 2026 from a position of structural strength.
“Issuance has expanded significantly, growing from roughly $31 billion outstanding in 2020 to over $50 billion today, and the market has firmly established itself as a core component of global risk-transfer strategy rather than solely as a specialist tool,” Kusche explained to Artemis.
He continued: “Sponsors across insurers, reinsurers, corporates, public-sector bodies and sovereign entities increasingly rely on catastrophe bonds as a mechanism for mobilising capital, diversifying counterparties and reinforcing resilience amid rising climate volatility.”
Kusche also emphasised that catastrophe bonds have transitioned from being an experimental concept to a fundamental component of contemporary risk-transfer strategies.
The executive also pointed out that these financial instruments are essential for mobilising capital, diversifying counterparties, and building resilience.
He continued: “The market has evolved into a well-established asset class which plays a central role in helping both public and private entities strengthen systemic resilience.
“With growing geographic participation, a broader range of perils, including new perils such as earthquake in Israel, continued issuances of cyber and terrorism, and a deeply diversified investor base, we expect continued healthy expansion in both volume and innovation throughout 2026.”
Turning over to the private ILS space, which has witnessed considerable growth throughout 2025 too, Rosenberg addressed what opportunities HCMA sees for the market at the January renewals, whilst also sharing the firm’s outlook for 2026.
“Private ILS continues to present highly attractive opportunities for both cedants and investors heading into 1.1 and beyond. As companies prioritise long-term capital resilience, collateralised quota shares, sidecars and hybrid structures provide flexible, targeted solutions that complement traditional reinsurance,” Rosenberg said.
“Growing sophistication in peril modelling, enhanced structuring and the ability to pair public catastrophe bond issuance with private participation allow for more efficient, multi-channel capital strategies. Investors also benefit from the expansion of risk types available in private format, including specialty and other exposures.”
As well as this, Rosenberg stressed that the evolving catastrophe bond market is creating more opportunities for portfolio construction across the entire ILS sector.
With expanding risk-return profiles and peril diversity, investors can tailor exposure with much greater precision, the executive noted.
Rosenberg added: “We expect 2026 to see continued innovation, deeper capital partnerships and increased use of collateralised structures across both property and specialty lines including growth in longer tail lines such as casualty.”
Read all of our interviews with ILS market and reinsurance sector professionals here.
