Mexico Earthquakes Test Plan for Investors to Absorb Government Disaster Costs

More on the role of catastrophe (cat) bonds and related derivatives in helping public as well as private entities in insuring natural disasters. See also and for more on cat bonds.

Investors recently bought a catastrophe bond designed to minimize the financial hit to the Mexican government from earthquakes. They could now be on the hook for as much as $150 million after two major quakes struck the country in quick succession.

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