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Cat derivates


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Cat derivates

  1. 1. 10.01.2012 CAT DERIVATESNEW WAY TO INSURE CATASTROPHE LOSSES Daniel Meyer Daniel Meyer
  2. 2. INTRODUCTION More natural disasters since 1970 Four times more from 100 to 400 Hurricane Andrew and Northridge earthquake sum up to 30 billion USD insurance loss Possible rise to 100 billion USD decrease of losses caused by  population growth  urban conglomerations  climatic change 210.01.2012 Daniel Meyer
  3. 3. PROBLEM The money of the insurance market is not sufficient Traditional Reinsurances are inappropriately 30 billion USD correspond to 30% of the whole insurance market The rise of natural disasters will increaseSolution: Need of a new source of capital 310.01.2012 Daniel Meyer
  4. 4. SOLUTION FOR INSURANCE COMPANIES Source Catastrophe Risk to the Capital market Attractive investment options for new investors Need of new financial products:  Cat-Bonds  Cat-Options 410.01.2012 Daniel Meyer
  5. 5. CAT-BONDS Simple finance product fix payments addicted to a natural desaster Three characteristics if a special trigger is achieved:  Loss of the whole money  Decrease of the monthly payments  No exposure payments anymore 510.01.2012 Daniel Meyer
  6. 6. CAT-OPTIONS More complex Instrument Linked to a Catastrophic-Loss Index Limited amount of losses or gains 610.01.2012 Daniel Meyer
  7. 7. CONCLUSION New ways to insure values Catastroph risk are needed The Capital market is a good alternative to the insurance market as a source of capital  About 13 trillion USD Cat Derivates are a good alternative for investors to traditionel financial products 710.01.2012 Daniel Meyer