Catastrophe bonds are gaining traction as a risk-transfer mechanism, providing post-disaster liquidity without increasing governments’ debt burdens. These bonds aim to deliver rapid funding while protecting national budgets and preserving fiscal space in the aftermath of a disaster. While the potential of catastrophe bonds as part of a diversified disaster risk resilience strategy is significant, challenges remain. With extreme weather events becoming more frequent and severe, this policy brief highlights the need for stronger financial preparedness to enhance resilience, particularly critical for countries already burdened by high sovereign debt. It provides an overview of current developments in the catastrophe bond market and outlines key concerns. It concludes by outlining how the G20 could enhance knowledge, accessibility, and transparency in the catastrophe bond market, while also emphasising the need to balance financial innovation with long-term disaster risk reduction.