Tag: bonds
How can cat bonds plan for a pure catastrophe?
What are Cat Bonds? Definition: A hybrid insurance-cum-debt monetary instrument that transforms catastrophe insurance coverage into tradable securities. Function: Transfers pre-defined pure catastrophe threat (e.g., earthquakes, cyclones) from sovereigns to international buyers. Issued through: Monetary intermediaries just like the World Financial institution, Asian Growth Financial institution, or reinsurers. Payout Set off: Primarily based on goal catastrophe parameters (magnitude, location) — parametric triggers. Relevance : GS 3(Financial system, Catastrophe