Insurance Securities: Cat breeders seek new varieties

As the fear of interest rate rises threatens virtually every market in the world from sovereign bonds to high-tech stocks to emerging market securities investors may no doubt be wondering where they can seek refuge.

As the fear of interest rate rises threatens virtually every market in the world ­ from sovereign bonds to high-tech stocks to emerging market securities ­ investors may no doubt be wondering where they can seek refuge.

Such an anxious environment may be the best thing to happen to catastrophe bonds, aka cat bonds. These structured financings, which transfer some of the catastrophic risk of property-casualty insurers to investors, have been struggling to get off the ground for the past several years.

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