ESG & Investing
‘Catastrophe’ Bond Market Headed for Major Surge in Issuance
- World Bank targets $5 billion in outstanding cat bonds
- Issuance comes as insurers increasingly unable to cover losses
Flooded homes and buildings in Karditsa region, Greece, in September.
Photographer: Konstantinos Tsakalidis/BloombergThis article is for subscribers only.
The market for catastrophe bonds is one of this year’s best-performing debt classes. It’s also about to see a significant increase in sales as the World Bank, a major issuer, prepares to ratchet up its offering.
The lender plans to increase the amount it has outstanding in so-called cat bonds to $5 billion over the next five years, compared with $1 billion today. That represents a substantial bump for an overall market that’s currently worth about $40 billion in total.