Probability of Exhaustion

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The probability of exhaustion is the likelihood that a cat bond, or transaction will suffer a complete loss.

Although rare, catastrophe bond transactions have suffered a complete loss in the past.

Currently, and as shown by Artemis’ directory of catastrophe bond transactions that have either defaulted, suffered losses or are at risk, the impacts of hurricanes Harvey, Irma, and Maria, typhoons in Japan and the California wildfires, are some of the events that have resulted in either a complete or partial loss to a range of cat bonds in more recent times.

 

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