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Insurance-Linked Securities: New Opportunities in Terrorism Risk

4/26/2025

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Summary

Story summary

Man Group highlights the benefits of incorporating non-natural catastrophe risks, such as terrorism, into the cat bond market for improved diversification.
UK and French terrorism exposures are currently accessible, with potential for further geographical expansion.
Recent transactions include Pool Re's £100 million terrorism cat bonds and GAREAT's first bond in France.
Investors may discover appealing risk-reward ratios despite challenges in terrorism risk modeling.
The evolving market presents enhanced investment opportunities in insurance-linked securities.

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Story summary

Man Group highlights the benefits of incorporating non-natural catastrophe risks, such as terrorism, into the cat bond market for improved diversification.
UK and French terrorism exposures are currently accessible, with potential for further geographical expansion.
Recent transactions include Pool Re's £100 million terrorism cat bonds and GAREAT's first bond in France.
Investors may discover appealing risk-reward ratios despite challenges in terrorism risk modeling.
The evolving market presents enhanced investment opportunities in insurance-linked securities.