Betting Against a Storm
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We’ve told you the insurance industry in Florida is in crisis. Or as one industry insider put it, it’s holding on by “a piece of chewing gum.”
In this episode, we explore possible solutions. We dive into the business of reinsurance, or insurance for insurers (turns out you can insure almost anything, including insurance policies); and we look at another possible solution that was born from the wreckage of Hurricane Andrew 30 years ago: the catastrophe bond, a financial instrument that allows investors to bet against storms and make money on risk. So long as a big storm doesn’t wipe them out completely.
Betting Against a Storm