ivan was in category 20 when it hit florida.
what category was ivan when it hit florida?
20
for example, if an insurer has built up a portfolio of risks by insuring properties in florida, then it might wish to pass some of this risk on so that it can remain solvent after a large hurricane. it could simply purchase traditional catastrophe reinsurance, which would pass the risk on to reinsurers. or it could sponsor a cat bond, which would pass the risk on to investors. in consultation with an investment bank, it would create a special purpose entity that would issue the cat bond. investors would buy the bond, which might pay them a coupon of libor plus a spread, generally (but not always) between 3 and 20%. if no hurricane hit florida, then the investors would make a positive return on their investment. but if a hurricane were to hit florida and trigger the cat bond, then the principal initially contributed by the investors would be transferred to the sponsor to pay its claims to policyholders. the bond would technically be in default and be a loss to investors.
catastrophe bond
irma was the first major hurricane to strike the state since wilma in 2005 and the first category 4 hurricane to make landfall in florida since charley in 2004. the storm made landfall in florida on the same date as hurricane donna, the last category 4 hurricane to strike the florida keys. irma was only the second hurricane to hit florida since wilma, the other being hermine in 2016. due to few very intense hurricanes since hurricane andrew in 1992, there was concern that many floridians never experienced or did not recall experiencing a hurricane as strong as irma was projected to be at landfall, with significant growth in population and assets during the previous 25 years.
effects of hurricane irma in florida