The Danish Red Cross has launched a catastrophe bond which offers dedicated insurance against volcanic eruptions.
- The project’s partners aim to raise as much as $3 million with the launch of this bond, which will transfer money to Denmark’s branch of the Red Cross.
- The bond will cover 10 volcanoes located in Cameroon, Chile, Colombia, Ecuador, Guatemala, Indonesia and Mexico.
- Catastrophe bonds typically insure against damage from natural disasters like earthquakes and storms, with some already including volcanic eruptions in baskets of covered perils.
- They tend to offer high yields to investors who run the risk of losing some or all of their investment if a disaster happens.
