Pension Funds Gamble on the Weather
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  • Corlyss

    “they’re insuring their own houses this hurricane season.”
    Need more of that. We the taxpayers should not be subsidizing stupidity inherent in living in a coastal or littoral flooding zone just because it doesn’t flood EVERY year.

    • Andrew Allison

      Yeah, but the trouble is that when it turns to you-know-what, guess who pays?

  • Fat_Man

    Somehow the name “Catastrophe Bond” is quite appropriate.

  • Bruce

    This smells like the derivative mess that almost brought down the economy in 09. They were selling insurance policies on the mortgage bonds back then and today they’re selling insurance on hurricanes. Amazing. This will probably have the same result. If we didn’t bail out broke entities, this would stop. Interesting post WRM.

    • Andrew Allison


  • Kevin

    As all the “Desperate Money” (as opposed to Smart Money” chases these investments, and we go through a few years of below average hurricane seasons, the returns on this will fall setting up the pension find investors from some truly nasty losses. Don’t any of these people remember what happened to reinsurance markets after Sept 11th? Or the wave of bankruptcies by Lloyd’s investors a few years back?

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