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Cat bond risk premium stays wide despite inflow-driven spread tightening
Sage Advisory says catastrophe bonds produced a steady 7.6% return over eight straight months in 2026, as the Swiss Re Global Cat Bond Index posted positive gains with no down month through August.
Catastrophe bonds are still offering one of the widest net risk premia available, even as spreads have tightened, according to a report cited by Artemis that attributes the spread compression to record capital inflows into the market.
The report, from Andrew Poreda of Sage Advisory Services, highlights that cat bonds generated a steady 7.6% return across eight consecutive months in 2026 with minimal volatility, and it points to strong index performance through the first eight months of the year.
Artemis reports that the Swiss Re Global Cat Bond Index returned 7.6% through the period, building on a 4.1% gain through mid-year and following an 11.4% total return in 2025.
The index logged eight consecutive positive months in 2026, with monthly results ranging from plus 0.5% to plus 2.2%, and Artemis notes that August was its best month so far at plus 2.2%, reached ahead of peak season.