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Cat bond market shouldn’t give “free-ride” to secondary perils: Tenax

The catastrophe bond market needs to price appropriately for so-called secondary perils and stop giving them a “free-ride”, as there is a need to continue offering this type of typically frequency or aggregate style reinsurance protection, but investors must be adequately compensated for it, Tenax Capital has said.

“For insurance to fulfil its social mandate and to help close the protection gap, secondary perils must remain within the scope of coverage all along the value chain,” Tenax Capital, the London based hedge fund investment manager that operates a catastrophe bond strategy rightly explained recently.

But the investment manager also stated, “At the same time, they need to be structured both to maximise capacity and to adequately remunerate investors.”


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