U.S. pension funds have been key in boosting the global reinsurance market’s capital base and helped reinsurers pay insurer claims arising from major disasters such as 2011’s earthquake in Japan and 2012’s Superstorm Sandy, according to the Casualty Actuarial Society.
Pension funds and other institutional investors have been drawn to property catastrophe bonds, which can pay out annual investment returns of 7 percent, rather than 10-year Treasury bills, which offer per annum payouts in the 2-percent range, according to Meyer Shields, a Fellow of the Casualty Actuarial Society and P&C equity research analyst at investment bank Keefe, Bruyette & Woods.
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