Concurrent with the rapid development of the market for catastrophe (cat) bonds, a steady decline in their risk premia … has been observed. Whether the latter trend is consistent with the evolution of natural disasters risk is an open question …. Indeed, a large share of outstanding risk capital in the cat bonds market appears to be exposed to some climate change …

Using a new financial product (Credit Risk Transfers, CRTs) we study how markets would price hurricane risk in U … diff-in-diff analysis shows that private investors react to hurricane risk. We derive the market price of mortgage credit … risk (the g-fees) for U.S. counties. Market based g-fees would be 10% higher for counties most exposed to hurricanes and 35 …