volcano cat bond

Global Parametrics, the parametric and index-based disaster risk transfer company, and the UK government’s Department for International Development (DFID), have agreed in principal to provide some of the capital necessary to back the Red Cross’ volcano catastrophe bond.

The Danish Red Cross and International Federation of Red Cross and Crescent Societies are making progress with their first ever catastrophe bond transaction, revealing a tiered trigger structure designed to ensure that impactful volcanic eruptions cause the cat bond to pay out.

International humanitarian movement the Red Cross is looking to the capital markets and the potential issuance of a parametric catastrophe bond to protect against volcanic risks, according to Adam Bornstein.