Catastrophe Futures

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Dictionary Says

Definition of 'Catastrophe Futures'

Catastrophe futures are futures contracts traded on the Chicago Board of Trade (CBOT). These futures contracts are used by insurance companies to protect themselves against future catastrophe losses. The value of a catastophe futures contract is equal to $25,000 multiplied by the catastrophe ratio for the quarter. The catastrophe ratio is a numerical value proided by the CBOT every quarter.
Investopedia Says

Investopedia explains 'Catastrophe Futures'

Catastrophe futures started trading on the Chicago Board of Trading (CBOT) in 1992. The value of a catastrophe future contracts increase when catastrophe losses are high and decrease when catastrophe losses are low. In the event of a catastrophe, if losses are high, the value of the contract goes up and the insurer makes a gain that hopefully offsets whatever losses that might be incurred. The reverse is also true. If catastrophe losses are lower than expected, the value of the contract decreases and the insurer (buyer) loses money.
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'Catastrophe Futures'

  • Insurers Hit By Catastrophe Losses

    http://stocks.investopedia.com/stock-analysis/2011/Insurers-Hit-By-Catastrophe-Losses-ACE-PRE-XL-RNR-RE0322.aspx
    ... Article; Comments (0). Insurers Hit By Catastrophe Losses.
    Posted: Mar 22, 2011 08:54 AM by Eric Fox. ...

  • Big Oil Looks To Prevent Another Oil Catastrophe

    http://stocks.investopedia.com/stock-analysis/2010/Big-Oil-Looks-To-Prevent-Another-Oil-Catastophe-XOM-COP-CVX-RDS-APA-CAM-NOV0726.aspx
    ... Article; Comments (0). Big Oil Looks To Prevent Another Oil Catastrophe.
    Posted: Jul 26, 2010 12:48 PM by Stephen D. Simpson, CFA. ...

  • Event-Linked Bonds: Competing Against A Catastrophe

    http://www.investopedia.com/articles/bonds/08/event-linked-bonds.asp
    Event-Linked Bonds: Competing Against A Catastrophe. ... In fact, that's why investors
    often refer to these bonds as catastrophe bonds (CAT). ...

  • Ace Limited's Long-Term Appeal

    http://stocks.investopedia.com/stock-analysis/2011/Ace-Limiteds-Long-Term-Appeal-ACE-HIG-TRV-CNA-ALL0511.aspx
    ... insurer Ace Limited (NYSE:ACE) reported decent insurance operating trends during
    its first quarter, but saw profits dented by catastrophe and investment losses ...

  • Catastrophes Cost Allstate

    http://stocks.investopedia.com/stock-analysis/2011/Catastrophes-Cost-Allstate-ALL-TRV-WRB-HIG-ACE0919.aspx
    ... Allstate has begun doing this in response to pressure from analysts who wanted
    information on the company's catastrophe exposure on a more timely basis. ...

  • What is a "force majeure"?

    http://www.investopedia.com/ask/answers/09/force-majeure.asp
    ... Trading; Forex; Personal Finance; Real Estate; Retirement; Insurance; ETFs;
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  • Find Secure And Affordable Post-Work Health Insurance

    http://www.investopedia.com/articles/retirement/07/retirement_healthcare.asp
    ... Fortunately, pre-Medicare individuals without good employer health insurance
    do stand a reasonable chance of avoiding financial catastrophe. ...

  • The Bond Market: A Look Back

    http://www.investopedia.com/articles/06/centuryofbonds.asp
    ... To learn more, see Event-Linked Bonds: Competing Against a Catastrophe.) Innovation
    in ... with the use of such instruments as interest-rate futures, interest-rate ...

  • How does leverage work in the forex market?

    http://www.investopedia.com/ask/answers/06/forexleverage.asp
    ... To avoid such a catastrophe, forex traders usually implement a strict trading style
    that ... On The Forex Market and Getting Started In Foreign Exchange Futures. ...

  • 5 Reinsurance Stocks To Watch

    http://stocks.investopedia.com/stock-analysis/2011/5-Reinsurance-Stocks-To-Watch-RE-RNR-PRE-MRH-WTM1020.aspx
    ... This is well below the historical long-term average of 120 to 130%. The industry
    is also seeing rising rates for catastrophe insurance. ...

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