(Bloomberg) – Bonds tied to weather risks tumbled the most in four years as Hurricane Matthew lashed Florida.
The Swiss Re Cat Bond Price Return Index dropped 1.7 percent this week, the steepest decline since Superstorm Sandy in 2012. The benchmark, which is recalculated every Friday, had climbed 14 straight weeks through Sept. 23.
Investors in the securities get above-market yields in exchange for the risk that principal could be wiped out by a major disaster in a specified area. S&P Global Ratings said 15 catastrophe bonds risk losses from Matthew, including the $1.5 billion Everglades Re, which protects exclusively against losses in Florida.
Want to continue reading?
Become a Free PropertyCasualty360 Digital Reader
Your access to unlimited PropertyCasualty360 content isn’t changing.
Once you are an ALM digital member, you’ll receive:
- Breaking insurance news and analysis, on-site and via our newsletters and custom alerts
- Weekly Insurance Speak podcast featuring exclusive interviews with industry leaders
- Educational webcasts, white papers, and ebooks from industry thought leaders
- Critical converage of the employee benefits and financial advisory markets on our other ALM sites, BenefitsPRO and ThinkAdvisor
Already have an account? Sign In Now
© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.
