Catastrophe Debt Market Gets First Dedicated Volcano Bonds
- Notes cover solely against damages caused by volcano eruptions
- Use predictive model to pay out after event, but before damage
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A bond sponsored by the Danish Red Cross is the first to offer dedicated insurance against volcanic eruptions, according to a statement.
The project’s partners aim to raise as much as $3 million for Denmark’s branch of the humanitarian network. Initial investors include Schroder Investment Management and Plenum Investments, a firm specializing in insurance-linked securities, according to the statement.