Catastrophe bond insurance risk spreads declined further in October 2026, as seasonal tightening continued to affect the overall yield of the cat bond market. Cat bond risk spreads now stand at their lowest since 2017 and while the tightening trend will end soon, it remains to be seen how lower spreads of new issuance affect the market yield going forwards.
The latest data on cat bond yields from Plenum Investments shows that the typical hurricane seasonal spread tightening continued last month, while with new issuance picking up again the expected loss of the cat bond market had increased in October as well.
As a result, by October 30th, the overall coupon yield of the catastrophe bond market had fallen to 8.41%, which is down from the September 25th figure of 8.74%.
The insurance risk spread of the outstanding cat bond market now stands at 4.33% at October 30th 2026, which is down roughly 13% on the same time last year.
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