As Investors Seeking Higher Yields Eye New Catastrophe Bond Issues, What Are The Key Risks?

As Investors Seeking Higher Yields Eye New Catastrophe Bond Issues, What Are The Key Risks?

More and more institutional investors around the world are turning to the reinsurance markets for higher returns for their portfolios. The result could be record issuance in 2013 for catastrophe bonds (CAT bonds)–high-yield debt issued by insurers in which principal, rather than being repaid at maturity, may instead offset insured losses when defined catastrophic events occur. At the same time, insurers are looking to increase their own protection in the face of increasingly severe natural-disaster claims from windstorms, earthquakes, hurricanes, and other natural disasters. The severity or frequency of such events may be increasing, and disasters that hit heavily populated areas can be prone to unexpectedly high insured losses. Even with the best predictive models, however, any given year can present reinsurers with surprises


The Association of International Wealth Management of India (AIWMI) is a not-for-profit organization and a globally recognized membership association for finance professionals. AIWMI primarily focuses on the broad and strategic role of developing a more robust and forward-looking training infrastructure for the financial services sector and to promote more active industry involvement and collaboration in training and continuing education. AIWMI is offering advanced international certification programs along with a wide variety of high-quality executive education programs. AIWMI programs combine state-of-the-art knowledge and skills with practical experience and insights into the functioning of the financial sector. All AIWMI courses and educational events have an intense and pragmatic curriculum. Participants are exposed to the latest developments within the financial services sector. AIWMI plays a key role in guiding the development of the financial services sector. AIWMI works with key industry participants’ viz. the Government, the Regulators, the Industries/Associations, the Corporate, the Media and the General Public to achieve its objectives. Besides enhancing technical competence and professionalism in the industry, AIWMI organizes events and facilitates discussions to promote best practices in leadership and talent development in the financial sector with an aim to become Asia’s premier center of excellence for financial education.

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