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Executive Summary (Q4 2025)
Primary Cat Bond market
2025 closed with a record new issuance of USD 21.2 billion in new Cat Bonds, bringing the outstanding market volume to USD 53.3 billion.
The average expected loss declined slightly more than the decline in the average coupon, indicating that risk-adjusted returns remain attractive across the overall Cat Bond segment.
Overall Cat Bond market observations
As of the end of 2025, the average yield to maturity was 6.47%, while market performance, as measured by the Plenum Cat Bond UCITS Index, reached a solid 9.99%. This marks the third year in a row with very strong performance; 3-year annualized performance stands at 12.81% p.a.
Hurricane Melissa, which severely impacted Jamaica and other parts of the Caribbean, was the most devastating event in the fourth quarter, although insured losses were limited. The Palisades and Eaton Fire in January 2025 remained the costliest natural catastrophe events on a standalone basis for the insurance industry in 2025. Meanwhile, the accumulation of losses from severe convective storms in the US was the biggest contributor to overall global insured losses from natural catastrophes, which totalled USD 107 billion for the full year.
Cat Bond market data is excluding life, mortgage and private Cat Bonds. Data as of December 2025. Source: Euler, Brokers
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