Introduction to Cat Bonds

One of the most common questions to Entropics is “what are cat bonds?” Cat bonds can be perceived as complicated and descriptions in words and graphics don’t always improve understanding. Thus, Entropics Asset Management AB has produced a short animation (3 minutes) explaining the concept and how it generates returns as well as improved insurance coverage.


Entropics Asset Management AB owns all rights. However, we grant anyone the right to redistribute it through embedding, as long as the source is credited and the Entropics web site is linked. We also require, for legal reasons, a reference to the disclaimer below. We do appreciate, but do not require, notification when the video is redistributed.


The video clip is subject to the general disclaimer concerning this web site. Briefly, this says that we have made every effort to provide a correct description of cat bonds, but can’t be held accountable for possible mistakes. Also, a short video can’t give an exhaustive description of the asset class. The video clip is not to be considered as advice concerning investments. Prior to an investment decision, you should contact your bank or investment adviser. Historical return is no guarantee of future results and investments in cat bonds always carry a risk of loss.


Data source for information on cat bond returns is Swiss Re Global Cat Bond Index Total Return, from 1 Jan 2002-31 Dec 2012. The index is a currency weighted basket of cat bonds at market prices tracked by Swiss Re Capital Markets. Underlying data is based on indicative prices only. Data source for information on stock market return is S&P 500 for the corresponding time period.

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