LONDON (Reuters) – Data aggregator Property Claims Service (PCS) upped its insured loss estimate from superstorm Sandy to $18.75 billion, leaving investors in a catastrophe bond issued by Swiss Re facing possible losses.
The PCS loss figure has only been made available to subscribers, but was confirmed to Reuters by cat bond funds and traders, who say the estimate is close to triggering a payout on part of a catastrophe bond sponsored by Swiss Re, the world's second-largest reinsurer.
So called “cat bonds” allow insurers to pass on extreme risks, such as those related to earthquakes or hurricanes, to financial market investors, and are seen as an alternative to reinsurance.
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