Cat Bonds and RMBS: Safer

By John Macomber Our class on property/casualty insurance and catastrophe bonds ended with several passionate comments about how Catastrophe Bonds are just like Mortgage Backed Securities. On a philosophical level they might both be financial instruments that lead to mischief and trading abuses; but in structure they are quite different. The key aspects should be […]

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How can we further encourage climate change insurance?

By Daniel An issue raised during the Aspen Skiing Corp case focused on the varying levels of susceptibility of companies to the impacts of climate change. It makes intuitive sense that the industries an companies most exposed to the threat of climate change are loudest in leading the call for change. Despite this, there is […]

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Thinking About Weather/Climate Insurance

By I-C H There is a saying in climate change which states: “mitigate what you can, adapt to what you can’t, and insure the rest”. While this may seem simplistic at first glance, I find it to be a fairly useful framework when thinking about efforts to address climate change. The first thing I find […]

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Catastrophe Bonds, Sustainable Cities, and Risk Management

By Erin I really enjoyed our class on catastrophe bonds. We discussed this financial tool as a means to remove layers of risk form the traditional reinsurance coverage market. We didn’t quite get to the full discussion related to cities utilizing the financial method themselves (as opposed to the insurance and reinsurance firms), but I […]

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Cat Bonds offer an opportunity to depoliticize our response to natural disasters

By Patrick Griffin Catastrophe bonds are a necessary tool to de-politicize the debates around disaster relief in the United States. The increasingly expensive property damage due to “super-storms” and droughts is demonstrating something that we might have already known about today’s Washington: markets can adapt to changing realities much more quickly than our divided lawmakers […]

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The challenge of pricing cat bonds

By Fabio Salim Cat bonds can be a great option to investors and issuers as a concept. However, they might not be such a great idea due some challenges related to the implementation and pricing of such assets. As discussed in the case, the way the cat bonds are designed are great for investors due […]

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Catastrophe Bonds: Financial Tool or Gambling Device?

By Anonymous Although the return on catastrophe bonds is dependent on events that are virtually impossible to forecast, dismissing these financial instruments as “gambles” is an inaccurate characterization that implies such investments are less sound investments than traditional financial products such as debt and equity.i These characterizations also do not fully value the contribution of […]

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