The types are the indemnity trigger, which uses the sponsor's actual losses, and the parametric, industry loss index, and modeled loss triggers, which use measurements or indexes, as well as hybrid triggers that combine them. Indemnity triggers take time to verify losses, while index triggers are faster but can differ from the sponsor's actual losses.
Cat bond trigger
- Japanese
- キャットボンドのトリガー
- Last reviewed
- October 4, 2026
This is a draft, shown for review before publication.
A cat bond trigger is the event condition that decides whether the collateral passes to the sponsor instead of the investors. It can be defined by the sponsor's actual claims, by measured values such as wind speed or earthquake magnitude, or by industry-wide losses.