What is a catastrophe bond (or cat bond

چهارشنبه 25 آذر 1394 13:34   نویسنده : محسن قره خانی      


We're regularly contacted by people asking us 'What is a catastrophe bond?' or 'What is a cat bond?' so we thought we'd provide a simple primer on the topic. Catastrophe bonds, also called cat bonds, are an example of insurance securitization to create risk-linked securities which transfer a specific set of risks (generally catastrophe and natural disaster risks) from an issuer or sponsor to investors. In this way investors take on the risks of a specified catastrophe or event occuring in return for attractive rates of investment. Should a qualifying catastrophe or event occur the investors will lose the principal they invested and the issuer (often insurance or reinsurance companies) will receive that money to cover their losses.

Catastrophe bonds were first issued in the mid 1990's, we have a comprehensive database containing the details of nearly every (over 280) catastrophe bond transaction. Major catastrophe events which hit the U.S. such as the Northridge eartquake and Hurricane Andrew were seen as events of such magnitude that the insurance industry began to look for alternative methods to hedge their risks and through collaboration with capital markets companies catastrophe bonds were born.

One of the key elements of any catastrophe bond is the terms under which the securities begin to experience a loss. Catastrophe bonds utilise triggers with defined parameters which have to be met to start accumulating losses. Only when these specific conditions are met do investors begin to lose their investment. Triggers can be structured in many ways from a sliding scale of actual losses experienced by the issuer (indemnity) to a trigger which is activated when industry wide losses from an event hit a certain point (industry loss trigger) to an index of weather or disaster conditions which means actual catastrophe conditions above a certain severity trigger a loss (parametric index trigger).

A catastrophe bond can be structured to provide per-occurrence cover, so exposure to a single major loss event, or to provide aggregate cover, exposure to multiple events over the course of each annual risk-period.

Some catastrophe bond transactions work on a multiple loss approach and so are only triggered (or portions of the deals are) by second and subsequent events. This means that sponsors can issue a deal that will only be triggered by a second landfalling hurricane to hit a certain geographical location, for example.

Catastrophe bond structure

The typical catastrophe bond structure sees a special purpose vehicle or insurer (SPV or SPI) enter into a reinsurance agreement with a sponsor (or counterparty), receiving premiums from the sponsor in exchange for providing the coverage via the issued securities. The SPV issues the securities to investors and receives principal amounts in return. The principal is then deposited into a collateral account, where they are typically invested in highly rated money market funds.

The investors coupon, or interest payments, are made up of interest the SPV makes from the collateral and the premiums the sponsor pays. If a qualifying event occurs which meets the trigger conditions to activate a payout, the SPV will liquidate collateral required to make the payment and reimburse the counterparty according to the terms of the catastrophe bond transaction. If no trigger event occurs then the collateral is liquidated at the end of the cat bond term and investors are repaid.

The diagram below shows a typical catastrophe bond structure including where the capital flows from one party to another.

Typical catastrophe bond structure

Catastrophe modelling is vital to catastrophe bond transactions to provide analysis and measurement of events which could cause a loss as well as to define the exposed geographical region.

Catastrophe bond structures have been used to hedge risks of hurricane, earthquake, typhoon, European windstorm, thunderstorm, hail and even life insurance related risks such as longevity and health insurance claims.

Read about recent and historic catastrophe bond transactions in our Deal Directory.

Keep up with the latest catastrophe bond news on our blog.




در این سایت مطالب مفیدی راجع به اوراق بهادار بیمه ای یافت می شود.

برچسب ها: اوراق بهادار بیمه ای ،
آخرین ویرایش: چهارشنبه 25 آذر 1394 13:36
دیدگاه ها ()
چهارشنبه 2 بهمن 1398 09:02
Very Nice Article..
یکشنبه 29 دی 1398 13:42
Hello, every time i used to check webpage posts here in the early hours in the dawn, since i like to gain knowledge of more and more.
چهارشنبه 25 دی 1398 17:56
I have to thank you for the efforts you’ve put in writing this blog. I am hoping to see the same high-grade blog posts from you in the future as well. In truth, your creative writing abilities has encouraged me to get my own, personal website now
دوشنبه 23 دی 1398 12:45
I am sure this piece of writing has touched all the internet visitors, its really really fastidious paragraph on building up new weblog.
شنبه 14 دی 1398 20:23
Good web site you have here.. It’s hard to find good quality writing like yours nowadays. I seriously appreciate people like you! Take care!!
چهارشنبه 11 دی 1398 18:18
We are a group of volunteers and opening a new scheme in our community. Your web site offered us with valuable info to work on. You've done an impressive job and our whole community will be grateful to you.
جمعه 6 دی 1398 10:39
Thanks for another great post. The place else could anyone get that type of info in such an ideal means of writing? I've a presentation next week, and I am at the search for such information.
چهارشنبه 20 آذر 1398 02:18
Thank you for your help
I was always impressed with your good writing.
I hope to share a lot of information with good looks in the future.
Always be happy and have a nice day ... !!
دوشنبه 18 آذر 1398 08:45
Download ringtones, message tones, alert tones etc... Free mobile ringtones for all type of phones, shared and submitted by our users. Choose from over 41000 ringtones uploaded under various categories. Get the latest ringtones in mp3 file format and set the coolest, trendiest tone as your mobile ringtone.<br>

<a href=https://dolotnuthietke.com>iphone 8 ringtone download mp3</a>
<a href=https://dolotnuthietke.com/sitesmapes.php>i p l ringtone download mp3</a>
<a href=https://dolotnuthietke.com>vaaste ringtone download mp3</a>
<br>

Access unlimited number of ringtones and download them with out sign up or registration. Surveys reveal that more than half of the mobile phone users between 15 to 30 years of age download ringtones at least once. To upload and share your collection of ringtones with other, click the 'Upload Ringtone' button and submit .mp3 files under 2MB in size.<br>

<a href="http://www.irannews3.ir/post/3924/">download ringtone in mp3</a>
<a href="http://sjfarhangi.ir/post/682/">d j ringtone download mp3</a>
598e76a
چهارشنبه 12 اردیبهشت 1397 16:46
Hello! I'm at work browsing your blog from my new apple iphone!
Just wanted to say I love reading through your blog and look forward to all your posts!

Carry on the superb work!
شنبه 24 تیر 1396 19:16
It's an remarkable piece of writing for all the web visitors; they will take benefit from it
I am sure.
چهارشنبه 13 اردیبهشت 1396 09:20
Hello there! I know this is somewhat off topic but I was wondering if you knew where
I could get a captcha plugin for my comment form? I'm using
the same blog platform as yours and I'm having trouble finding one?
Thanks a lot!
چهارشنبه 25 آذر 1394 13:39
خیلی دوست دارم تبادل لینک داشته باشم.بهم سر بزن اگه خوشت اومد تبادل انجام بده
 
لبخندناراحتچشمک
نیشخندبغلسوال
قلبخجالتزبان
ماچتعجبعصبانی
عینکشیطانگریه
خندهقهقههخداحافظ
سبزقهرهورا
دستگلتفکر

درباره وبلاگ


  • این وبلاگ جهت اشتراک گذاری مطالب علمی و آموزشی و معرفی موضوعات مورد علاقه است.

نویسندگان

  • محسن قره خانی(59)

آرشیو موضوعی

صفحات جانبی

ساخت وبلاگ در میهن بلاگ

شبکه اجتماعی فارسی کلوب | اخبار کامپیوتر، فناوری اطلاعات و سلامتی مجله علم و فن | ساخت وبلاگ صوتی صدالاگ | سوال و جواب و پاسخ | رسانه فروردین، تبلیغات اینترنتی، رپرتاژ، بنر، سئو