Catastrophe bonds (cat bonds) are emerging as an important link between capital markets and climate risk management. At GRI’s webinar, Cat Bonds as a New Frontier for Climate Risk Management, the session provided an overview of how cat bonds transfer catastrophe risk from insurers to investors and their growing relevance as extreme weather events widen the insurance protection gap. It also outlined key risks and challenges for both issuers and investors, including modelling uncertainty, data limitations, basis risk, pricing complexity and the importance of transparent disclosure and governance frameworks to support market confidence and scalability.

Building on this foundation, a panel of industry experts from TD Insurance, GC Securities, and CPPIB shared practical perspectives drawn from recent Canadian issuance experience, with TD Insurance’s 1st and 2nd cat bond issuances marking an important step in domestic market development. Speakers highlighted lessons learned in strengthening internal governance, refining risk modelling approaches, and coordinating across legal, treasury, and risk functions, while sustained investor engagement was identified as central to market credibility. Repeat issuance, credible analytics and efficient regulatory processes were seen as key conditions for market growth, positioning cat bonds as a complementary tool to strengthen insurance capacity and financial resilience in an increasingly volatile climate environment.