Allure of catastrophe bonds rising for Asian investors

Natural disasters are a fact of life, but 2011 was a particularly catastrophic year, with Asia at the epicentre. Japan’s earthquake, a worse-than-usual hurricane season in the Philippines and the worst Thai floods in 50 years, helped contribute to a near-record $110 billion in catastrophe-related payouts by insurance companies globally. Yet despite this negative backdrop, funds that invest in catastrophe ('cat') bonds – which transfer the insurance risk of mega-catastrophes from i…