Catastrophic for Catastrophe Bonds

Catastrophe Bonds, for those who don't know, also known as cat bonds, are issued by insurers and reinsurers to provide protection against losses realized from the most severe natural disasters. Those investing in these bonds stand to profit handsomely if the worst doesn't happen. However, those same investors stand likely to get tagged badly if it does, as these bonds will be used as a financial resource as insurance claims mount. Well, what had been an almost quiet hurricane season, erupted two weeks ago when Hurricane Helene tore through the Big Bend region of Florida and devastated the mountainous regions of western Georgia, South Carolina, and North Carolina, as well as parts of Tennessee, Virginia and other states.

Now comes Hurricane Milton that appears not to be weakening to the degree that those folks at the Weather Channel and Fox Weather were hoping. In 2022, the fallout from Hurricane Ian cost insurers about $60B. Most of the models for this storm alone are running estimates of up to $75B with the most extreme models projecting losses of up to $150B. That's just Milton. I don't have data on Helene as that storm erased entire towns, but almost no households in those towns had flood insurance, as the southern Appalachian Mountains have never been known to flood.

I may sound like I am from another time and place, but there is always prayer. No, you can't pray for safety or for some awful outcome to pass you over but still land upon someone else, at least I don't think you can. What anyone can do though, is pray for a best outcome, pray for strength and pray for the ability to persevere. If one must suffer, and I don't write this lightly, or carelessly... then prayer can aid in the ability to suffer as well as possible. Now, God bless.