A new ETF allows individuals to earn income by insuring against natural disasters through investing in catastrophe bonds. We break down the historical returns, risk, fees, and structure of this intriguing investment opportunity.
Topics covered include:
- What types of natural disasters are increasing
- How insurance companies use reinsurance and cat bonds to protect against extreme losses
- Why home insurance premium increases should be lower in 2026
- How cat bonds are structured and what makes them a unique fixed income security
- What to consider in deciding to invest in cat bonds.
Investments Mentioned
Brookmont Catastrophic Bond ETF (ILS)
Stone Ridge High Yield Reinsurance Risk Premium Fund (SHRIX and SHRMX)
Show Notes
Miami Is Entering a State of Unreality by Mario Alejandro Ariza—The Atlantic
Historical Hurricane Tracks—NOAA
2026 Climate and Catastrophe Insight—AON
BERKSHIRE HATHAWAY INC. 2002 ANNUAL REPORT—Berkshire Hathaway
When, Where and How Often Insurers Fail—PACICC
Swiss Re Global Cat Bond Performance Index returns 11.40% for 2025—Artemis
Catastrophe Bonds by Alexander Braun and Carolyn Kousky—Wharton
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Related Episodes
508: Who Should Bear the Cost? Socialized vs. Market-Based Risk Management
481: How to Navigate the Crippling Home Insurance Crisis
444: Natural Disasters: Are They Truly Increasing?
Transcript
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