California's earthquake authority moves down its tower with a riskier cat bond

Artemis reported on 29 October that Ursa Re 2026-1 comprises a 350 million dollar Class D and a 250 million dollar Class H. Class D attaches at 4.784 billion dollars of losses, with an expected loss of 2.68% and a price range of 4–4.5%. Class H attaches at 1.5 billion dollars, with an expected loss of 6.35% and a price range of 8.5–9.5%. Artemis says Class H carries the highest expected loss among the deals the authority has sponsored, and marks a move down its tower. A catastrophe bond is a bond whose principal passes to the insurer when a disaster is triggered. The instrument provides 2.875 billion dollars, or about 35%, of the authority's 8.214 billion dollar risk transfer as of 30 April.

The price multiple points the same way. On our calculation, Class H pays about 1.4 times its expected loss at the midpoint. According to Artemis, the average multiple in the first nine months of 2026 was 2.4, against 5.15 in 2023. The multiple is the ratio of the spread to the expected loss. For comparison, Hartford's Foundation Re IV paid 6.25% for a 1.36% expected loss in 2023; it now offers 3–3.5% for a 1.56% expected loss.

Demand is pushing prices lower still. SafePoint raised its Nature Coast Re 2026-2 target from 250 million to 600 million dollars and cut the Class A range from 6.75–7.5% to 6.25–6.75%. Hamilton enlarged Easton Re from 250 million to 300 million dollars and lowered its range from 4.75–5.25% to 4–4.75%. Plenum said on 30 October that spreads have tightened by about 15% year on year and could fall a further 10% or so in 2027. This capital stays with modellable catastrophe: none of the third-quarter issues carried non-catastrophe risk. Icosa co-founder Jordan Nickerson separates falling spreads from lower attachment points. In his view, the latter changes the risk itself.