Cat Bonds Need to Expand?

Here’s the upshot:

Among the ideas suggested for market expansion are expanding the lines of business covered to include risks such as workers compensation and liability risks and also allowing cat bonds to address broader geographical coverage rather than peril and location specific risks.

Is this cheap talk? We definitely get a lot of that in the (re) insurance business. It’s a mega competitive market and the only real way of innovating is by introducing new information that gives you an edge in evaluating risk.

AND THEN you need to be proven right in your risk evaluation, which can often take years, perhaps take too long, actually, for you to make any money on it.

What investors are saying is: give us the information we need to evaluate new risks. Well, shucks, wouldn’t we all like that…