Pandemic bonds shrug off swine flu threat
* Threatened pandemic yet to hit extreme mortality bonds
* Trigger levels high and geographically specific
* Bonds cover only a fraction of insurers' potential losses
By Catherine Evans
LONDON, April 28 (Reuters) - Fears of a swine flu pandemic have yet to affect bonds securitising insurers' exposure to a sharp rise in death rates, because millions of people would have to die from the virus before any payout is triggered.
Investors said extreme mortality bonds -- catastrophe bonds that allow investors to bet against the risk of a devastating pandemic -- had barely reacted to the rapid spread of a virus that has killed up to 149 people in Mexico. [ID:nLS803449] [ID:nLS472470].
About $1.5 billion of such bonds are outstanding, according to an October 2008 report by Guy Carpenter, the reinsurance unit of insurance broking giant Marsh & McLennan (MMC.N: Quote, Profile, Research).
"There has not been any price impact on these bonds simply because the swine flu event is insignificant at the current point in time," said Christian Bruns, VP Insurance-Linked Investments at Swiss private bank Clariden Leu. Outstanding bonds cover only the United States, Britain, Canada, France, Germany and Japan, he noted, with deaths on a massive scale required before investors face any loss. Continued...
India Investment Summit 2009
Top executives and bankers discuss their own plans and the broader opportunities and challenges for India during the Reuters India Investment Summit in Mumbai and Bangalore. Full Coverage | Blog
An icon bows to changing times
With his Playboy Enterprises in talks to be sold for about $300 million, the 83 year-old Hugh Hefner will be giving up control over the iconic adult entertainment empire he founded that was instrumental in shaping society's opinions on nudity, sex and free speech. Full Article





India
US
UK









