ArrowArtboardCreated with Sketch.Title ChevronTitle ChevronIcon FacebookIcon LinkedinIcon Mail ContactPath LayerIcon MailPositive ArrowIcon Print

Betting against disaster

 (placeholder image)
The Kinugawa River in Ibaraki Prefecture breached its banks in last September, causing widespread flooding.   © Kyodo

TOKYO -- With growing instability in financial markets and decent returns on traditional financial products ever harder to attain, many investors are turning to an unlikely source in order to diversify portfolios. 

     Catastrophe bonds, commonly referred to as cat bonds, do not take risks on volatile price movements of traditional financial products, such as stocks and other types of bonds. Instead, they take risks on earthquakes, typhoons and other natural disasters. Investors can earn returns on the principal in full with interest, if no disaster occurs before maturity.

Sponsored Content

About Sponsored Content This content was commissioned by Nikkei's Global Business Bureau.

Discover the all new Nikkei Asia app

  • Take your reading anywhere with offline reading functions
  • Never miss a story with breaking news alerts
  • Customize your reading experience

Nikkei Asian Review, now known as Nikkei Asia, will be the voice of the Asian Century.

Celebrate our next chapter
Free access for everyone - Sep. 30

Find out more