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Asset Class
Fixed Income
Catastrophe Bond
Catastrophe Bond
Acronym
Cat Bond
Plural Name
Catastrophe Bonds
Parent Asset Class
Fixed Income
Catastrophe
Bonds
(Cat
Bonds
) are securities linked to
insurance
underwriting.
More about Catastrophe Bond
Related Topics
Industries
Insurance
Property and Casualty
Experts - People
Larry Cunningham
Notes
Insurance
companies offer them to help cover certain catastrophe losses
They pay a
return
unless the specified catastrophe takes place, then they typically have large losses (if the losses are above a set threshold)
Uncorrelated with conventional stock and
bond
investments
(natural distastes and catastrophes are unrelated to economic
cycles
)