CEA risk transfer limit grows slightly to $7.912bn, with catastrophe bonds now 36%

The California Earthquake Authority’s (CEA) reinsurance program grew slightly to include limit of $7.912 billion at the end of 2025, while the catastrophe bond market was providing its largest share of the risk transfer tower ever, at 36% of total limit.

In recent year’s, the California Earthquake Authority’s (CEA) need for risk transfer, which it procures from the traditional and collateralized reinsurance market, as well as through its catastrophe bonds, had declined as its overall exposure base shrank.

But, in 2025, the CEA’s in-force exposure increased again, rising from almost $641 billion at the end of 2024, to over $653 billion by the end of 2025. That is still lower than it was at the end of 2023, but a notable uptick.

As the CEA’s in-force exposure declined in recent years, so too did its risk transfer tower, having been as large as $9.6 billion back in 2021.

When we last reported on the CEA and its reinsurance, as of September 30th 2025, the insurer had around $7.67 billion of risk transfer limit in-force, with the catastrophe bond market supplying around 34%.

Notably, we also highlighted at the time how strong execution in the catastrophe bond market helped the CEA to lower both its reinsurance attachment point and costs associated with risk transfer.

Now, the latest data as of December 31st 2025, shows that the CEA’s risk transfer tower had increased to $7.912 billion of limit.

Of that, around $5.087 billion was from the traditional or collateralized reinsurance markets, while the remaining $2.875 billion was from the catastrophe bond market.

As a result, some 36% of the CEA’s risk transfer limit came from the cat bond market at the end of 2025, which our data shows to be a record contribution from cat bond investors to its claims paying capacity.

The catastrophe bond market has been a growing contributor to the CEA’s risk transfer over-time, even as the total limit it renewed has declined.

Artemis’ data (see the chart below) shows that cat bonds made up as little as 23% of the risk transfer tower for the CEA as recently as 2020, but has been growing steadily since late 2024 to now it’s largest share.

The CEA’s total claims paying capacity rose from $19.1 billion at the end of 2024, to $19.8 billion at the end of 2025, with growth in available capital, revenue bonds, and the slight increase in risk transfer.

The cat bond protection has increased by somewhere around $500 million over the same period, as the CEA’s traditional reinsurance has shrunk.

The CEA has $2.875 billion of outstanding catastrophe bond coverage still in-force as of today, sitting 4th in our cat bond sponsors leaderboard.

There are $425 million of Sutter Re cat bonds scheduled to mature this June and a further $880 million of Ursa Re cat bonds that mature in December.

The CEA will also have renewed reinsurance at the January 2026 renewals as well, so its risk transfer tower has likely changed further since then.

But, the growth of the catastrophe bond component over-time demonstrates that the CEA appreciates the efficient multi-year, collateralized protection that it can secure from the insurance-linked securities (ILS) market. So we suspect the insurer will be back in the cat bond market this year, potentially later in the first-half.

View details of every catastrophe bond sponsored by the CEA in the Artemis Deal Directory.