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CAT bond issuance hit a record $17.3 billion in first half of 2026
AM Best said capacity outpaced demand by more than 25% and mid-year renewals saw risk-adjusted pricing fall 15% to 20% for Florida-linked deals.
CAT bond issuance in the 144A property catastrophe market rose to $17.3 billion in the first six months of 2026, setting a new first-half record, according to AM Best. The second quarter alone accounted for $11.3 billion, topping the prior quarterly record from the second quarter of 2025, and exceeding the full-year issuance in most years in the market’s history.
AM Best linked the surge to reinsurance capital flooding the market, with three consecutive years of strong returns leaving capacity providers with more capital than they can deploy prudently. It also pointed to the first half of 2026 recording the lowest level of insured catastrophe losses in five years, which further increased the capital base.
At mid-year 2026 property catastrophe renewals, AM Best described conditions as orderly and increasingly favorable for reinsurance buyers, estimating that capacity supply exceeded demand by more than 25%. It said the Guy Carpenter Global Property Catastrophe Rate-on-Line Index fell 16% year-to-date through July 1, 2026, and that June 1 renewals centered on Florida saw risk-adjusted pricing declines of 15% to 20%, extending rate decreases seen in 2025.
AM Best said terms and conditions were largely stable but noted early signs of softening, including wider availability of aggregate excess-of-loss and subsequent event coverage, and broader natural peril coverage. In the ILS market, returns compressed even while remaining positive, with the Swiss Re Global CAT Bond Index returning 4.1% for the first half of 2026 and the ILS Advisers Index rising to 3.9%, according to AM Best.