Catastrophe bonds expand to lower U.S. disaster insurance costs
CBS News reports that catastrophe bonds — securities that pay investors unless a defined disaster occurs — are being used by U.S. insurers and guarantors to increase capital available for claims and to finance home‑hardening projects. The story highlights North Carolina Insurance Underwriting Association (NCIUA) bonds that direct investor proceeds toward fortified roofs on Oak Island, and notes a new April launch of a catastrophe‑bond exchange‑traded fund (King Ridge Capital Advisors) that opens the market to public investors. Rising insured losses (from about $30B in 2015 to over $110B in 2024) and higher premiums have driven interest in these instruments.
Economy/Finance
Insurance
Climate/Environment
🔍 Key Facts
- Insured property losses rose from roughly $30 billion in 2015 to over $110 billion in 2024 (Insurance Information Institute)
- NCIUA — North Carolina’s insurer of last resort — has sponsored catastrophe bonds since 2009 and added a provision to fund weather‑resilience upgrades (e.g., fortified roofs) when investors profit
- In April (this year) King Ridge Capital Advisors launched the first catastrophe‑bond ETF, broadening investor access to the market