Wildfires Fan Record Sales of Catastrophe Bonds to Backstop Risk

Insurers sold catastrophe bonds at record levels in 2025 to transfer wildfire risk to investors, according to data from the capital markets. Catastrophe bonds allow insurance companies to shift potential losses from major disasters to bondholders in exchange for higher returns. The increase followed significant wildfire seasons in multiple U.S. regions during 2024 and 2025.

Next story