A report from Bank of New York Mellon says insurance-linked securities could amount to $150 billion in five years, with catastrophe bonds representing $50 billion of that total. Catastrophe bonds currently outstanding are valued at $19 billion, according to Aon Benfield. "The initial investor base was dominated by hedge funds and private equity, but we are seeing more long-term investors such as pension funds buying cat bonds," said Dean Fletcher of BNY Mellon. "Investors are attracted by the high yields in the current low-interest-rate environment."

Related Summaries