Crucially for portfolio diversification, cat bonds have typically low correlation to more traditional investments, even during periods of heightened volatility."
The current market conditions have created a significant imbalance between supply of cat bonds and capital able to absorb it. So effectively coming into 2023 there's the potential to triple the normal issuance volume of cat bonds, demand for risk capital is so high.”
What I loved about the asset class is it’s mainly driven by risks from earthquakes and hurricanes. That fundamental isolation from market risks was immediately appealing to me. My father, a mathematician, gave me a tail risk pricing problem when I was about 12 years old and it has been something that has fascinated me intellectually ever since."
Its not credit risk, it's actually event risk. Institutional Investors prefer a specialist, because they want somebody handling this that has deeper knowledge about the risk.”