This is fascinating. S&P says that none of the cat bonds outstanding will be hit by Katrina. A story in the same issue says that Katrina is going to be the biggest insured hurricane since Andrew.
If cat bonds don’t respond to a storm this size, what good are they? Clearly those promoting this alternative to cat reinsurance have found a way to take in money without having to worry about paying for losses down the road.
Remember, Insurance companies don’t intend to pay claims. The first response is to reject a claim and the second response is to reject the claim, the thrid response—-I think you get the picture.
Why sell the protection if you do not have the intention to pay out.
This is fascinating. S&P says that none of the cat bonds outstanding will be hit by Katrina. A story in the same issue says that Katrina is going to be the biggest insured hurricane since Andrew.
If cat bonds don’t respond to a storm this size, what good are they? Clearly those promoting this alternative to cat reinsurance have found a way to take in money without having to worry about paying for losses down the road.
Remember, Insurance companies don’t intend to pay claims. The first response is to reject a claim and the second response is to reject the claim, the thrid response—-I think you get the picture.
Why sell the protection if you do not have the intention to pay out.
I second that motion.
Please do your research on what Cat bonds are, what they insure, and the policy proceedures as to when they activate before making stupid comments.