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Original Risk: A Society for Change Agents

2008 to be another big year for catastrophe bonds?


Good article here from Risk & Insurance Magazine on catastrophe bonds.

In the article they quote Fitch Ratings analyst Don Thorpe as saying that he has ‘sensed new interest after some reported disgruntlement on the part of Florida officials that their expansion of the Florida Hurricane Catastrophe Fund did not lead to any great reduction in property insurance rates, especially in relation to the new risk taken on‘ (see our post from two days ago for an update on the Florida Cat Fund). He is also quoted as saying that he has ‘seen an uptick in inquiries from bankers since the beginning of the year‘.

J. Eric Brosius, SVP reinsurance, for Liberty Mutual is also quoted in the article as saying that ‘even in a softening market, which 2008 is expected to be barring any severe catastrophic events, the instruments will offer good returns free from what the experts call “uncorrelated risk”.’

So these two industry experts believe the market will remain strong even in the face of softening in the main reinsurance market and a global credit crunch. What do you think? When an issue of interest arises we’ll be running polls to gauge our readerships opinion. Please take the time to take part below!


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