Catastrophe bonds play an important role in keeping the insurance market functioning at a time when it’s getting harder for homeowners to get affordable coverage. But what happens catastrophe actually strikes?
Cat bonds help insurers spread risk to investors. Extreme weather created by climate change may disrupt the balance of risk and reward.
They’re called CAT — for catastrophe — bonds, and insurers and investors can’t get enough of them.
Some urge FEMA to issue a catastrophe bond to help pay for wildfire recovery.
