Speaking today at a briefing held in Monte Carlo at the Rendez-vous event, Angela Yeo, Senior Director, Analytics at global ratings agency AM Best has highlighted how investors’ appetite for catastrophe bonds has helped the space continue to grow.With third-party capital deployed in reinsurance anticipated to grow by almost 7% this year, with AM Best and Guy Carpenter Yeo explained how a lot of this growth boils down to the substantial growth that’s been seen within the catastrophe bond market in 2025.“In the first half of 2025 we’ve already seen record issuances reaching nearly $17 billion, which has already surpassed full year 2024 issuances.And we think that it is quite realistic to expect the year ending in about $19 to $20 billion,” Yeo explained.

“The total outstanding bond amounts is about $53 billion year to date, which is both a record in itself, but it is also now clearly the biggest sub segment under ILS.” According to Artemis’ data, while new annual records were set for 144A property cat bond and total 144A cat bond and related ILS issuance.However, the total cat bond issuance record was broken soon after July 1st and at $18.4 billion at the time of writing, according to Artemis’ data, is on track to hit and exceed the $20 billion mark.Yeo continued: “So, the next biggest sub segment is collateralized reinsurance, which could range between $46 and $50 billion without estimates.

It is very difficult to know the exact figures as a lot of these deals are private.” Yeo also highlighted how cat bond sponsor diversification has shifted throughout 2025, particularly regarding small-to medium-sized US domestic insurers, “So, what are the factors for cat bond growth? Well, investors just love them.The risk attachment is remote very much within the upper layers, the perils are very well defined.They are performing strongly and they’re still attractive, not correlated, typically, with other broader capital markets,” Yeo commented.

Adding: “The collateral yields themselves may be low in 2025 due to some of the actions taken by central banks.However, they’re still opposed to 2021 levels.So, we have seen good evidence that supply is still up in all disasters from investors.” Later on, AM Best also highlighted how casualty securitization has continued to see steady growth across the ILS market.

“There’s different risks being securitized, so there’s a lot of movement in the market, and we’re watching that very carefully,” Yeo added.She continued: “I think one of the attractions of cat bonds has been that they are relatively short term, and to securitize a more long-term risk is something that in the past people had doubts about it, but we have seen first steps towards that development.So, I think we will see more of that.” Further adding to this, Greg Carter, Managing Director, Analytics, EMEA & Asia Pacific, explained how the industry appears to moving towards a point where casualty securitization is perhaps becoming more of a receptive instrument for investors.

“I think the non nat cat space is seeing growth, and there’s a lot of interest, but I think it’s that long tail nature.And if you look at the kind of risks that suit ILS structures, it’s those risks that can be modeled reasonably accurately.Catastrophe buffer fits that well, I think casualty fits it less well, but there’s a lot of work ongoing, and we are reaching the critical mass where it becomes a more receptive instrument for investors,” Carter explained..

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