Both cat bonds and corporate bonds are fixed income instruments so it is relevant to compare the risk premium of cat bonds with similarly rated traditional corporate bonds. Currently, cat bonds pay a higher risk premium compared to similarly rated corporate bonds. Read more.
Cat bond investors will often refer to the “multiple” of a certain cat bonds. The term “multiple” is rarely used in other financial sectors, but is actually an important metric when evaluating a cat bond investment opportunity. It also reflects the fact that cat bonds are closely related to the traditional insurance industry, where a similar terminology is more common. So, why should you care about it? Read more.
Cat Bond Lite is an exciting development in the Cat Bond sphere. By enabling smaller entities to transfer insurance risks to the capital markets, new sponsors can utilize the mechanism and to investors it promises further investment and diversification possibilities. Read more.