{"id":82321,"date":"2026-01-13T15:39:28","date_gmt":"2026-01-13T10:09:28","guid":{"rendered":"https:\/\/vajiramandravi.com\/current-affairs\/?p=82321"},"modified":"2026-01-13T15:39:28","modified_gmt":"2026-01-13T10:09:28","slug":"catastrophe-bonds","status":"publish","type":"post","link":"https:\/\/vajiramandravi.com\/current-affairs\/catastrophe-bonds\/","title":{"rendered":"Catastrophe Bonds"},"content":{"rendered":"<h2><b>Catastrophe Bonds Latest News<\/b><\/h2>\n<p><span style=\"font-weight: 400;\">Recently, the Kerala government has asked the Union government to consider instituting \u2018catastrophe bonds\u2019 as protection against disaster-linked losses.<\/span><\/p>\n<h2><b>About Catastrophe Bonds<\/b><\/h2>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">These are <\/span><b>insurance-linked securities<\/b><span style=\"font-weight: 400;\"> that transfer the financial risks from natural disasters from the <\/span><b>bond issuer to the capital market.<\/b><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">These are a unique <\/span><b>hybrid insurance-cum-debt financial product<\/b><span style=\"font-weight: 400;\"> that transforms insurance cover into a tradable security.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">At present, the financial risk is fully borne by the State or Central governments.<\/span><\/li>\n<\/ul>\n<h2><b>Key Stakeholders and Mechanism of Catastrophe Bonds<\/b><\/h2>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">These bonds are <\/span><b>sponsored by sovereign governments,<\/b><span style=\"font-weight: 400;\"> who pay premiums.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">These are <\/span><b>issued through intermediaries<\/b><span style=\"font-weight: 400;\">, such as the <\/span><b>World Bank or Asian Development<\/b><span style=\"font-weight: 400;\"> Bank, to reduce issuance risks.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">These are purchased by global investors, <\/span><b>including pension funds, hedge funds<\/b><span style=\"font-weight: 400;\">, and family offices, who are attracted by high returns and the diversification benefits of non-market correlated risks.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">The risk level and frequency of disaster occurrence directly influence coupon rates.<\/span>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">For instance, earthquake-related bonds often offer lower premiums (1-2%) compared to those covering cyclones or hurricanes.<\/span><\/li>\n<\/ul>\n<\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>Global scene:<\/b> <b>Mexico and the Philippines<\/b><span style=\"font-weight: 400;\"> have been using CAT bonds to protect themselves against disaster-linked losses.<\/span><\/li>\n<\/ul>\n<p><b>Source: <\/b><strong><a href=\"https:\/\/www.thehindu.com\/news\/national\/kerala\/kerala-asks-centre-to-issue-catastrophe-bonds-as-protection-against-disaster-linked-financial-risks\/article70497848.ece\" target=\"_blank\" rel=\"nofollow noopener\">TH<\/a><\/strong><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Catastrophe Bonds are insurance-linked securities that transfer the financial risks from natural disasters from the bond issuer to the capital market. Read more about Catastrophe Bonds, Meaning, Mechanism, Key Stakeholders, Latest News.<\/p>\n","protected":false},"author":24,"featured_media":82340,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[1],"tags":[1435],"class_list":{"0":"post-82321","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-upsc-prelims-current-affairs","8":"tag-catastrophe-bonds","9":"no-featured-image-padding"},"acf":[],"_links":{"self":[{"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/posts\/82321","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/users\/24"}],"replies":[{"embeddable":true,"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/comments?post=82321"}],"version-history":[{"count":0,"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/posts\/82321\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/media\/82340"}],"wp:attachment":[{"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/media?parent=82321"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/categories?post=82321"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/tags?post=82321"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}