Perspectives

A Category 5 headline doesn't mean a cat bond pays out. Learn how Saffir-Simpson categories, central pressure, and storm track actually drive cat bond triggers.

Cat bonds are not green bonds — but they fund something ESG investors care deeply about: the financial infrastructure that helps societies survive and recover from catastrophe. Here is the nuanced case for treating cat bonds as resilience capital.

When Hurricane Ian struck Florida in September 2022 as a Category 4 storm, it became the first major "peak peril" loss event to hit the cat bond market in years. What followed — a 10% single-day index drop, a sharp divergence between trigger types, and a historic repricing — tells the most instructive story in the asset class's modern history.

Swiss Re Global Cat Bond Total Return Index (SRGLTRR) annual returns 2002–2025: 23 out of 24 years positive. +19.7% in 2023, +17.3% in 2024, +11.4% in 2025. Only loss year: 2022 (Hurricane Ian). How cat bonds compare to equities, credit, and Treasuries across crisis periods.

Learn the difference between parametric and indemnity cat bond triggers, including tradeoffs in transparency, speed, and basis risk.

Cat bonds eliminate counterparty risk (fully collateralized SPV), trade on a secondary market, and have transparent pricing. Traditional reinsurance offers indemnity protection and multi-year sponsor relationships. Data-backed comparison for capital markets investors.

A practical guide to cat bond trigger mechanisms, including indemnity, parametric, industry loss index, and modeled loss triggers.

A comprehensive guide for investors new to catastrophe bonds, covering the basics of how they work and why they might fit in your portfolio.