Franklin Templeton Investment Solutions, the hedge fund-focused arm of the global asset manager, has maintained its overweight conviction on the catastrophe bond asset class, with the firm citing that while yields and spreads have compressed compared to last year, the market remains healthy, with no evidence of weakening fundamentals.
The opening quarter of 2026 saw catastrophe bond and related insurance-linked securities (ILS) issuance hit $6.7 billion, as a Q1 record 35 transactions came to market from a variety of repeat sponsors and three first time sponsors.
Commenting on the cat bond market’s growth in the opening quarter of 2026, Franklin Templeton said: “Catastrophe (cat) bond issuance has remained strong, with momentum carrying through the end of last year into the first quarter and likely extending into the next quarter. Existing sponsors are expected to return to refinance maturing bonds, while new sponsors continue to enter the market.
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