Catastrophe bonds have evolved from a skeptical experiment into a vital risk management tool, allowing governments and insurers to transfer disaster risk to investors. Pioneered by Karen Clark’s hurricane modeling, these bonds gained credibility after accurately predicting Hurricane Andrew’s devastation. Today, they offer high yields and portfolio diversification, attracting pension funds and insurers. The market now covers not only hurricanes but also pandemics, as seen with the World Bank’s pandemic bond launched after Ebola and later activated during COVID-19. Jamaica’s $150 million bond exemplifies their real-world impact—designed for extreme events, it recently paid out after Hurricane Melissa met its parametric trigger. Unlike traditional insurance, these instruments provide rapid funding, crucial for recovery. As climate risks grow, catastrophe bonds are expanding access to disaster financing, fostering resilience in vulnerable nations and transforming the global insurance landscape.