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Aon Securities reports record growth of bond market disasters

The world market for catastrophe bonds reached a record $30 billion

The global bond market disasters, providing insurance in the event of a hurricane, terrorist attack, pandemic or hacker attack in the first half of 2018 rose to a record volume of $30 billion.

Fixigen as reported, in January-June this year, investors held 29 deals on placement of catastrophe bonds totaling us $9.7 billion They continue to invest in this segment of the insurance market, despite last year’s losses due to the large number of natural disasters.

In the first half of 2018 natural disasters were fewer and they were less devastating: losses amounted to $45 billion, 64% less than the average for the January-June over the previous decade. However, the hurricane season in the Atlantic has only just begun, and the aggregate amount of damages for the year could grow.

The global cost of natural disasters in 2017 exceeded $ 300 billion

Help. Catastrophe bonds emerged in the early 1990-ies to protect insurers, but now they have completely changed the situation in the industry. Such debt securities generally contain a clause that in the event of a catastrophic event the obligation of the Issuer (initially it was of an insurance or reinsurance company) to pay the principal amount or interest shall be extended or canceled. Such bonds have a high yield in the low interest rate environment around the world attracted to him more attention as pension funds and sovereign wealth funds.

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