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Despite the disasters, the market for catastrophe bonds is doing well


Hubert Roy

20 September 2019 13:30

Bush fires repeatedly, devastating hurricanes and other cataclysms frequent does not hamper the enthusiasm of the market for catastrophe bonds, which allow insurers to transfer the risk of natural disasters, few of the investors.

Aon Securities reports that it has subscribed for a total value of 5.4 billion us dollars (G$ US) of this type of investment from 1 July 2018 to 30 June 2019, including life insurance and health insurance. This capital market that is alternative now has a volume of 93 billion US dollars.

He even smashed a record over the last year. The highest limit of coverage for a catastrophic event is now 30.3 billion US dollars, an increase of us $ 300 million (US$ M).

Losses are more frequent

The increase in disasters is, however, so the bond market disasters has more losses than before. Before 2017, the seven fund, catastrophe bonds have suffered losses, totalling 900 MILLION US$.

Over the past three years, there are 25 funds that have suffered losses. They totaled $ 1.25 billion US$.

“The last twelve months have been rich in teachings for the participants of the market of catastrophe bonds. It was also reassuring, because the compensation mechanisms have worked as intended, emphasizes Paul Schultz, CEO of Aon Securities. After this period of contraction, we expect this market to resume its growth later this year and in 2020. “

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