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Catastrophe Bonds: A Primer and Retrospective


Abstract: Since 1997, the catastrophe (CAT) bond market has provided the insurance industry with protections against natural disasters that have grown more frequent and costly. This article explains how CAT bonds work, and then looks at how the market for them has grown in size, coverage, and sophistication over the past two decades. It also explores how and why different types of institutions use CAT bonds to transfer insurance risks.

Keywords: insurance; bonds; bond markets;

https://doi.org/10.21033/cfl-2018-405

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Bibliographic Information

Provider: Federal Reserve Bank of Chicago

Part of Series: Chicago Fed Letter

Publication Date: 2018

Order Number: 405