23 October 2026
King Ridge Capital explores $65B catastrophe bond market and portfolio diversification
Proactive - Interviews for investors
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King Ridge Capital Managing Partner Vijay Manghnani joined Steve Darling from Proactive to discuss the growing catastrophe bond market and its potential role in helping investors diversify their portfolios.
Catastrophe bonds, or CAT bonds, allow insurance companies, governments and other issuers to transfer natural disaster risks to capital market investors. These securities can be linked to hurricanes, earthquakes, wildfires and floods, offering returns in exchange for assuming the risk of potential losses.
Manghnani said the market has grown to approximately $65 billion in assets, expanding at around 10% annually. Issuers include government agencies in Florida, California and Texas, as well as countries such as Jamaica, Mexico and the Philippines. The World Bank has also supported catastrophe bond transactions for sovereign entities.
A key attraction for investors is that CAT bonds are primarily exposed to specified natural disaster events rather than traditional interest-rate movements, potentially offering diversification benefits compared with conventional fixed-income investments.
Manghnani also discussed climate change and its implications for catastrophe risk. Investment managers assess potential exposure to hurricanes, floods and wildfires, using catastrophe modelling and risk analysis to determine whether the returns adequately compensate for potential losses.
Investors can access the asset class through specialist investment managers and insurance-linked securities funds. However, CAT bonds carry significant risks, including potential losses of principal if specified catastrophe triggers are met.
#proactiveinvestors #hanETF CatastropheBonds #CATBonds #AlternativeInvestments #FixedIncome #PortfolioDiversification #InsuranceLinkedSecurities #ClimateRisk #RiskManagement
Catastrophe bonds, or CAT bonds, allow insurance companies, governments and other issuers to transfer natural disaster risks to capital market investors. These securities can be linked to hurricanes, earthquakes, wildfires and floods, offering returns in exchange for assuming the risk of potential losses.
Manghnani said the market has grown to approximately $65 billion in assets, expanding at around 10% annually. Issuers include government agencies in Florida, California and Texas, as well as countries such as Jamaica, Mexico and the Philippines. The World Bank has also supported catastrophe bond transactions for sovereign entities.
A key attraction for investors is that CAT bonds are primarily exposed to specified natural disaster events rather than traditional interest-rate movements, potentially offering diversification benefits compared with conventional fixed-income investments.
Manghnani also discussed climate change and its implications for catastrophe risk. Investment managers assess potential exposure to hurricanes, floods and wildfires, using catastrophe modelling and risk analysis to determine whether the returns adequately compensate for potential losses.
Investors can access the asset class through specialist investment managers and insurance-linked securities funds. However, CAT bonds carry significant risks, including potential losses of principal if specified catastrophe triggers are met.
#proactiveinvestors #hanETF CatastropheBonds #CATBonds #AlternativeInvestments #FixedIncome #PortfolioDiversification #InsuranceLinkedSecurities #ClimateRisk #RiskManagement