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Busy year expected for cat bonds

The catastrophe bond market looks set for another busy year, with covers on US hurricane risk, storms in Europe, earthquakes, and disasters in Japan, reinsurance broker Guy Carpenter says.

It says that despite last year’s losses, sponsors and investors are likely to remain interested in aggregate covers for severe storms such as tornadoes, hail and thunderstorms.

Japan’s Tohoku earthquake caused a total loss to the Muteki cat bond, while Mariah Re bonds are expected to take a total loss of $US200 million ($192 million) following the southern US storms last year.

Guy Carpenter says the catastrophe risk asset class continues to expand and deepen and will serve an important role in adding capacity to the traditional reinsurance market.

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