'Cat bonds' investors may find themselves in deep water

Monaco

INVESTORS in "cat bonds" - or catastrophe bonds - may find themselves in financial straits after insurers tot up their losses from hurricanes Harvey and Irma and put the nascent alternative reinsurance market to the test.

In recent years, cat bonds have enjoyed incredible growth in the US as insurers seek a more affordable option than taking out a contract with traditional reinsurers.

Much like with a traditional bond, investors hand over a sum of money to obtain a cat bond, and are paid interest. The…