Windstorm bonds breeze through markets

Following a successful placement of flood and earthquake cat bonds in April, a new tranche, this time covering windstorm risks in seven European countries, is launched. By transferring the risks from insurance companies to willing market investors, these bonds provide an additional instrument for risk management.

The parametric index trigger in those bonds is linked to objective measurements of wind speed at various locations rather than an estimate of losses, which helps speed up disbursement and lower costs of damage assessment.