Catastrophe Bonds

Catastrophe Bonds

Assignment Introduction: Catastrophe bonds are a way for insurance companies to mitigate their risk in regards XX disasters. If someone were to invest in a ‘cat bond’, as they are called, he or she would receive payments on the bond as promised. If a natural disaster were to occur, part or all of the principle of the bond would be used to help pay for the effects of the said natural disaster. We will begin by looking in more detail at what a cat bond is exactly and how certain natural disasters have been affected by cat bonds. We then look at the correlation between the Eurozone crisis and cat bonds. Lastly, we will dive into whether or not cat bonds are necessary and/or effective. You will then write on your thoughts regarding the videos and articles researched.