Over 800 million people live within 100km of an active volcano around the world. To prepare for a potential eruption, the Danish Red Cross and International Federation of Red Cross and Crescent Societies, alongside industry partners, are planning a catastrophe bond to cover risks associated with 10 volcanoes in 4 regions. This will likely be one of the most globally focused cat bonds to ever hit the market.

The Red Cross’ volcano cat bond will target covering the risks associated with ten volcanoes from across South, Central and North America, as well as Asian & African countries.

Never before has a catastrophe bond included such a broad spread of exposures, but given the focus of each exposure is a single volcano and the risk of it erupting at a certain level of severity, it makes the modelling possible for a transaction covering risks across a wide-spread of the globe.

Leave a Comment