Asset Classes

Catastrophe Bond
Cat Bond
Catastrophe Bonds

Catastrophe Bonds (Cat Bonds) are securities linked to insurance underwriting.

More About Catastrophe Bond

  • Insurance companies offer them to help cover certain catastrophe losses
  • They pay a return unless the specified catastrophe takes place, then they typically have large losses (if the losses are above a set threshold)
  • Uncorrelated with conventional stock and bond investments (natural distastes and catastrophes are unrelated to economic cycles)