Actuarial Mathematics
Catastrophe bonds, often referred to as cat bonds, are financial instruments used by insurers and reinsurers to transfer the risk of natural disasters to the capital markets. These bonds provide a way for insurers to raise funds in the event of a catastrophe, offering investors a higher yield in exchange for taking on the risk that the bond may not be repaid if a specified disaster occurs. By utilizing catastrophe bonds, companies can effectively manage their risk exposure while attracting investment capital.
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