Ep. 26: Richard Pennay, CEO of Aon Securities on catastrophe bonds and their role in climate adaptation and resilience

Catastrophe bonds, or cat bonds, have exploded in popularity in recent years. They have emerged as a critical financial tool to foster resilience from hurricanes and other disasters that are made worse or more frequent by climate change. By the end of 2025, more than $60 billion in cat bonds were outstanding. The world’s leading firm in structuring cat bond transactions is Aon Securities. My guest today is its CEO, Richard Pennay. Over more than two decades, he has helped to pioneer development of this innovative financial instrument. I sat down with Richard to learn more about how these deals work and what they’re used for. I wanted to better understand their unique role in resilience. And I was curious to know how their use may expand as the effects of climate change worsen, and as states and localities may need to shoulder more of the cost of their own recovery from disasters.