As per S&P Global Ratings, despite several catastrophe bonds defaulting following record-high insured losses from the California wildfires in early 2025 and through recent catastrophe years, the default rate across both rated and non-rated catastrophe bonds remains very low at just 2.3%.
The rating agency recently published a new report that provides insights from historical catastrophe bond defaults.
Catastrophe bonds typically provide 12-month coverage, though some may cover multi-year periods.
S&P noted that certain aggregate deals not structured on a calendar-year basis defaulted in early 2025, as losses from both 2024 and 2025 accumulated.
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