Cat bonds poised for recovery after depressed year

The introduction of a new risk model combined with a series of global disasters has seen a depressed catastrophe bond market in the second and third quarters of this year. But there are signs that the fourth quarter may see a recovery. Thomas Whittaker reports

New Zealand quake

Catastrophe (cat) bond investors and issuers around the world are facing depressed deal levels after a series of natural disasters combined with the launch of a revised risk model in the second quarter of 2011. But industry experts are expecting issuance to revive in the fourth quarter of this year, as the need for hedging becomes a focus once more.

The cat bond markets had a good 2010. Issuance of the bonds, which transfer risks from reinsurance companies, which sponsor the deals, to investors

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