Catastrophe bonds, which have delivered high returns to investors, are facing scrutiny due to their complex and rigid payout structures.
Tag: cat bonds
The Insurance Market Is Flirting with Natural Disasters
Despite warnings of a potential surge in Atlantic storms this summer, insurance for catastrophes is once again attracting capital. Investors do have some reasons to be confident, but they shouldn’t be overconfident.
Catastrophe Bonds Based on Models that Often Underestimate Climate Risks
Catastrophe bonds and other insurance-linked securities, which powered last year’s highest-returning hedge fund strategy, are built on calculations that can underestimate a new breed of risk stemming from high-frequency events such as wildfires and thunderstorms, according to veteran investors.
Investors’ Bets on Mother Nature Are Paying Off Big
How much would you need to be paid to cover the risk of the next massive hurricane or earthquake? Investors in the insurance market have a new answer: Way more than they were before.
Many Pensions and Endowments Are Exposed to Hurricane Michael
Pension funds, endowments, wealthy families and other large investors could be on the hook for a portion of damages caused by Hurricane Michael, which intensified Wednesday. The exposure for these large investors stems from their ownership in catastrophe bonds, which are issued by insurers or entities seeking insurance. The investors receive interest payments but can… Continue reading Many Pensions and Endowments Are Exposed to Hurricane Michael
Atlantic Ocean May Get 5 Named Storms at Once
For tropical storms, two’s company, three’s a crowd and five is, well, unprecedented. Maybe not for long. Weather forecasters are watching a disturbance in the western Gulf of Mexico that has a 50 percent chance of becoming Tropical Storm Kirk in the next two days, according to the National Hurricane Center. That would make five… Continue reading Atlantic Ocean May Get 5 Named Storms at Once