Catastrophe bonds, or cat bonds, have become a key element in reinsurance strategies, according to Mitchell Rosenberg, Managing Director and Co-Head of Global ILS at Howden Capital Markets & Advisory. In an interview with The Insurer, Rosenberg discussed the growing importance of these financial instruments in the industry.
Rosenberg noted that the market for cat bonds has expanded significantly over the past five years. Issuance increased from $35 billion in 2020 to more than $50 billion in 2025, now accounting for 10% of the global reinsurance market. He said this growth signals a shift in how risk is managed and transferred through capital markets.
“Cat bonds are no longer an experiment and now sit at the heart of risk transfer strategy, which is the culmination of years of development,” Rosenberg stated.
He described changes among market participants: “We are seeing repeat sponsors who have been active for years, dormant sponsors who might have last issued several years ago and are now coming back into the market, and a new and exciting wave of first-time sponsors entering the space,” said Rosenberg. “We also expect the cat bond market to continue expanding in both volume and diversity of product and structure. That evolution is going to bring in more investors and create new points of entry.”
Rosenberg added that as insurers face challenges from climate volatility and shifting capital conditions, integrating capital markets with traditional reinsurance can help unlock additional capacity and foster new partnerships.