The huge profits investors have made on catastrophe bonds are now raising eyebrows.

Catastrophe bonds allow issuers to pass part of their risk over to capital markets.

In 2023, no other asset class produced a better-performing bet for hedge funds than cat bonds.

In 2023, cat bond issuance reached an all-time high of $16.4 billion, according to Artemis.

The bond protects Axis and its subsidiaries against systemic cyber shocks over a two-year period starting in January.

The Swiss Re Global Cat Bond Performance Index is up 18%, while the Bloomberg U.S. Treasury Index has dropped about 1%.