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Secondary cat bond trading picks up in H1 2026 as liquidity improves
Swiss Re Capital Markets said TRACE activity totaled 806 trades through June 2026, about 37.5% more than H1 2025.
The secondary market for catastrophe bonds stayed bid-heavy in the first half of 2026 as more participants sought to buy bonds than sell out of existing positions, boosting overall trading activity after a relatively subdued 2025, according to Swiss Re Capital Markets.
Swiss Re Capital Markets’ latest insurance-linked securities ILS insights report said TRACE activity totaled 806 trades through June 2026, roughly 37.5% higher than H1 2025. It also pointed to a rise in activity beginning in March, with volumes of 148 trades in March, 198 in May, and May 2026 described as the most active month in the secondary market since March 2020.
The report said that in mid May the catastrophe bond market saw a particularly active and broad week of secondary trading, with 129 different bonds, about one third of outstanding catastrophe bond classes, changing hands in the week of May 18. Swiss Re Capital Markets linked the pickup to increased liquidity as the secondary cat bond market matures.
On spreads, Swiss Re Capital Markets said US Wind spreads continued tightening through 2025 and into early 2026, supported by continued investor demand and limited loss activity. It found US Earthquake spreads rose over the first half of 2026, Industry Loss spreads were relatively flat, and overall spread moves were more moderate than the larger post-Hurricane Ian swings, while also noting the market’s low correlation with broader financial and alternative assets.