Emerging Trends In Catastrophe Derivatives

Law360, New York (June 11, 2009, 12:00 AM EDT) -- When a tornado or hurricane whips through a community such as Mena, the small Arkansas town affected by a tornado last month, in addition to the human toll, property losses can mount quickly.

When a catastrophic event hits a larger, more developed area, these losses are multiplied. An event is designated a "catastrophe" by the insurance industry when claims are expected to reach a certain dollar threshold, currently set at $25 million.

According to Property Claim Services (PCS) of the Insurance Services Office, catastrophes occurring in...
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