Wildfire Catastrophe Bond Issuance Surpasses $5 Billion in 2026

Issuance of catastrophe bonds linked to wildfire risk has topped $5 billion year‑to‑date in 2026, approaching the 2025 full‑year record of $5.55 billion. The broader catastrophe‑bond market grew to roughly $65.9 billion outstanding by mid‑2026, up from $61.3 billion at the end of the previous year.

Insurers are increasingly using these bonds to transfer wildfire exposure to capital markets, especially after the January 2025 Los Angeles wildfires caused about $40 billion in insured losses. Nigel Green, chief executive of deVere Group, said the surge signals that wildfire bonds are moving from a niche tool to a mainstream asset class. In Europe, market participants such as Tyson Vickery of Marsh and Will Bruce of Aon note that while demand is rising, the region’s wildfire‑bond market remains much smaller and less mature than the United States.

The growth is driven by improved risk modelling, which gives investors confidence that returns are largely uncorrelated with stock or interest‑rate movements. Analysts expect Europe could become a more significant market as fire risk accelerates on the continent.