The Huge Profits Investors Have Made on Catastrophe Bonds Are Raising Eyebrows
- Cat bonds delivered investors a 20% return last year
- As the bonds dodge Beryl fallout, questions are mounting
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A strategy that’s delivered specialist investors huge returns is now facing scrutiny, amid concerns that its risk-reward dynamics might be skewed against some issuers.
Catastrophe bonds, which are issued by insurers, reinsurers and governments seeking an extra layer of disaster coverage, have been handing investors double-digit returns. Issuers, meanwhile, have seen their costs soar.