The IVYSH Take

One Year After LA: The Gap Between Claims Paid and Communities Rebuilt

Claims Paid

$22.4B

in insurance payouts

Still Displaced

70%

of survivors not home

Fast claims ≠ fast recovery. The disconnect between financial response and community resilience is the defining challenge of disaster finance in 2026.

Market Snapshot

Reinsurer Capital

$760B

↑ Record High

Cat Bond Outstanding

$61B

↑ 24% YoY

2026 ILS Return Est.

↓ From 11%

Capital Markets & ILS

Market Shift

Cat Bond Returns Expected to Drop to 6% in 2026—Market Reset Underway

After three consecutive years of double-digit returns, the ILS market is entering a "historically soft" period. Spreads are compressing as record capital chases limited opportunities.

Cat Bond Returns Trend

202314.2%

14.2%

202412.8%

12.8%

202511.0%

11.0%

2026 (Est.)6.0%

6.0%

IVYSH Signal: The 6% projection signals a fundamental reset—not a crisis, but a maturation. Sophisticated buyers should lock in multi-year capacity while pricing favors cedents.

Source: Artemis →

Record Deal

California FAIR Plan Triples Cat Bond Target to $750M—Largest Pure Wildfire Bond

The insurer of last resort has turned to capital markets with unprecedented scale. The deal tripled its initial target, signaling strong investor appetite for wildfire risk—once considered "untouchable."

$750M

Final Size

Initial Target

Pure Wildfire Bond

IVYSH Signal: When insurers of last resort access capital markets at scale, it signals both market maturation and traditional reinsurance capacity constraints. Watch for other state pools to follow.

Source: Insurance Journal →

Record Issuance

2025 Cat Bond Issuance Shatters Records: $25.6B (+45% YoY)

Outstanding market now exceeds $61B. Fifteen first-time sponsors entered in 2025 alone—the most ever.

Annual Cat Bond Issuance ($B)

2022

$12.3B

2023

$15.1B

2024

$17.7B

2025

$25.6B 🎯

IVYSH Signal: 15 new sponsors in one year signals we've crossed an adoption threshold. The question isn't whether to use cat bonds—it's how to optimize placement.

Source: Artemis →

Climate change is showing its claws. We're seeing a fundamental shift in risk patterns that historical models simply don't capture.

— Munich Re, 2024 Annual Review

Catastrophe Losses & Trends

Annual Review

Munich Re: 2024 Global Losses—$320B Total, $140B Insured

Third costliest year on record. Fifth consecutive year above $100B in insured losses. The trend line is clear—and accelerating.

2024 Global Nat Cat Losses

Total Economic Loss

$320B

Insured Loss

$140B

Protection Gap

$180B

IVYSH Signal: When a reinsurer says climate is "showing its claws," pricing and underwriting changes follow. Expect secondary peril loads and attachment point conversations to intensify.

Policy & Regulation

Landmark Rule

California Mandates 85% Market Share in Wildfire Zones

Insurers wanting to include reinsurance costs in rates must commit to writing 85% of their statewide market share in distressed areas. A potential model for other climate-exposed states.

IVYSH Signal: California is writing the playbook for climate-related insurance regulation. Watch for Florida, Texas, and Louisiana to consider similar frameworks.

Legislative

Senate Bill 876: California Proposes Doubling Claims Delay Penalties

After $22.4B paid, legislators say it's still not fast enough. The bill reflects growing political pressure on insurers despite record-fast payouts.

IVYSH Signal: Expect claims operations to become a competitive differentiator—and a regulatory flashpoint.

Technology & Innovation

Partnership

Cytora-Climatig: Real-Time Climate Risk in Underwriting Workflows

AI meets climate science: the partnership embeds climate analytics directly into underwriting decision points, eliminating manual assessments and enabling real-time portfolio steering.

IVYSH Signal: This is the future: climate risk embedded at point-of-decision, not bolted on. Carriers not integrating similar capabilities will face adverse selection.

⚡ Quick Hits

Protection Gap Narrows: Global uninsured losses drop to historic low of 38%—but disparity persists in emerging markets where coverage remains below 10%.

Federal Pullback: 2026 budget eliminates climate research, FEMA equity programs—implications for public-private partnerships and state-level resilience funding.

NAIC Task Force: State regulators create Natural Catastrophe Risk Task Force, adding extreme cold as priority peril—a nod to Winter Storm Uri's $15B+ lessons.

Academic Watch: Yale Law Journal proposes federal reinsurance for state residual markets in "The Uninsurable Future"—structural solutions gaining academic traction.

Need to make sense of these trends for your portfolio?

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