derby378
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Sun Nov-19-06 11:42 AM
Original message |
Quiet hurricane season means big profits for catastrophe bondholders |
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Investors who bet against the odds of another devastating Atlantic hurricane season now stand to cash in big-time on "catastrophe bonds." Contrary to expert predictions, the season turned out to be the mildest in years.
Insurance companies sell the bonds, yielding interest rates of about 15%, to help them absorb huge payouts in the event of another storm like Hurricane Katrina.
The risk is high: If a storm causes major damage during a bond's term, all the investment, including the capital, can go back to the insurer to cover the cost of recovery.
But as the mildest hurricane season in a decade winds down, hedge funds and other investors that bought the securities stand to make a mint. The hurricane season, which began on June 1, ends on Nov. 30. Not a single hurricane has hit the U.S. mainland.http://www.usatoday.com/money/industries/insurance/2006-11-18-catastropheprofits_x.htm?csp=26
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bullimiami
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Sun Nov-19-06 12:15 PM
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1. the rigged insurance game insures they make money all of the time. |
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and anytime they have to pay out more than they like, they just bilk it from the customers.
either they make a profit or a windfall profit.
why were they allowed to pass the losses (or reduced profits) of last year and are not required to pass back the savings of this year?
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DU
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Fri Apr 26th 2024, 07:25 AM
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