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Pete Vloedman From Kirsten Bischoff, Opalesque New York:
While numbers such as $185bn (Barclays Capital) are floated as estimates of the damage done in Japan, it is counterintuitive to think that the catastrophe bond market may see relatively small losses, and even be teed up for a period of increased opportunity following the second largest insured loss in the world.
"Similar to after Hurricane Katrina we are expecting a better opportunity set and risk return profile," Pete Vloedman, CEO, founding partner, of Anchor Risk Advisors told Opalesque. "Reinsurers and insurance companies will be looking for ways to address their capital needs. Katrina happened in the summer of 2005 and 2006 and 2007 were two of the largest years for catastrophe bond issuance."
There are 14 catastrophe bonds potentially linked to this event, and right now there is a delay on receiving information needed to calculate what losses, if any some of these securities will see (nor even the full extent of all insurance liabilities). The Sydney Morning Herald has reported that claims adjusters have "poured into Japan", however the continuing radiation leaks from the Fukushima nuclear plant are hampering these efforts, as adjusters cannot get near the most damaged areas.
But early estimates are that the cat bond industry, which has enjoyed 64% returns over the past five years, will not be greatly affected by the Ja...................... To view our full article Click here
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