On October 24, 2009
Would You Let a ‘Cat’ Cross your Path This Halloween?
They were downright spooky last year, but Wall Street and the insurance industry seem to have gotten over their fright and are now ready to embrace “cat bonds” again. A report from Guy Carpenter, the reinsurance broker for Marsh & McLennan, says that insurers may issue $1.2 billion to $2.2 billion in new catastrophe bonds during the fourth quarter, bringing the total to about $3 billion to $4 billion for the year. Catastrophe bonds are an alternative to reinsurance, the insurance that property casualty insurers like Allstate need to protect themselves from major disasters like a tsunami or a Cat-e-gory Four Hurricane. But instead of going to a Bermuda reinsurer, insurers can buy a bond that allows them to collect…
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