With 2025 setting new records for catastrophe bond issuance, the market is expected to maintain its strong momentum as it heads into 2026 as a resilient and growing asset class with strong technical underpinnings, Etienne Schwartz, CIO Liquid Strategies at ILS investment manager Twelve Securis told Artemis.At this time of writing, , but a number of new issuances are still scheduled to settle before the end of 2025, so we the year-end figure is expected to be meaningfully higher.2025 is already 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.As the year draws to a close, Schwartz spoke to Artemis to provide an end of year outlook for the catastrophe bond market as the industry begins to move into 2026.

“We expect the cat bond market to maintain its strong momentum into 2026.The market has benefitted from record issuance, continued investor demand, and a stable loss environment, all of which reinforce its role as a core risk-transfer mechanism for sponsors,” Schwartz explained.“The structural health of the asset class which was marked by attractive relative value, low correlation to traditional markets and disciplined underwriting remains intact.” With cat bond spreads tightening throughout 2025, and pricing improvements being seen for cedents, issuance activity saw a substantial increase, and according to Schwartz, Twelve Securis expects this trend to continue in 2026.

The CIO also indicated that a heavy primary pipeline should also help support market depth and promote pricing equilibrium as investors gain more opportunity to differentiate among risks.“Meanwhile, innovations around secondary perils and parametric triggers continue to broaden the market without undermining its fundamentally conservative structure.Overall, we see the cat bond market entering 2026 as a resilient and growing asset class with strong technical underpinnings,” Schwartz added.

Given that the catastrophe bond market is presently experiencing lower spreads in comparison to the peaks observed in 2023, we asked Schwartz whether he considers the current lower spread environment to be sustainable.Additionally, we also asked the executive whether he anticipates a return to levels that lie between the current situation and the peak, as excess capital is absorbed in the forthcoming months? “Spreads have tightened meaningfully through 2025, influenced by seasonal post-hurricane dynamics, strong investor demand, and an absence of major loss events.While this level of compression is unlikely to continue indefinitely, we believe the current environment is broadly sustainable in the mid-term,” Schwartz told Artemis.

He continued: “Upcoming heavy issuance is likely to act as a stabilising force: greater supply should moderate further tightening but does not necessarily imply a sharp reversion.“The relative value of catastrophe risk versus corporate credit and high yield remains compelling, which supports continued investor engagement.” Schwartz concluded: “Unless the market experiences significant insured events or a major shift in macro conditions, we expect spreads to settle within a disciplined, technically grounded range, likely between current levels and long-term medians, rather than a return to cycle peaks.” ...

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