Tag Archives: trapped collateral

The Case of the Trapped Collateral

Was Hurricane Irma in Florida a fire drill for the insurance-linked securities (ILS) and collateralized reinsurance markets — or was this the real thing? In terms of losses, what happened is at the lower end of what the Irma loss in Florida could have become. But what if some of the stuffing had not been knocked out of the storm in Cuba, and if Irma had landed on either the east or west Florida coasts instead of lumbering into the Everglades?

If Irma was a fire drill, then one topic it has highlighted is that faced by “trapped collateral”.

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