Resets

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Multi-year deals, whether catastrophe bonds or collateralized reinsurance agreements, that don’t use a parametric trigger (indemnity/industry loss trigger) could expose investors to greater risks than they are being compensated for, over time. To counter this, the trigger of a multi-year deal can be reset (typically annually) to maintain a constant exposure level to investors, via remodelling the bond based on the most current exposure data.

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