2006 Hurricane Risk

Posted: 22 Sep 2008

See all articles by Erik Stafford

Erik Stafford

Harvard Business School - Finance Unit

André Perold

Harvard Business School - Finance Unit

Date Written: October 23, 2006

Abstract

SUBJECT AREAS: Insurance, Investment management, Personal finance, Risk, Risk management.

In May 2006, a resident of Key West, FL had to decide whether to renew his policy to insure against hurricane damage. The policy would cost $13,000 for one year, $5,000 more than what he paid in 2005. At the same time, a wealthy California resident was contemplating an opportunity to buy a "cat note" that offered a high yield, but with a chance of losing the full investment if severe hurricanes struck the coastline of the United States.

Suggested Citation

Stafford, Erik and Perold, André F., 2006 Hurricane Risk (October 23, 2006). HBS Case No.: 207-075, Available at SSRN: https://ssrn.com/abstract=1270422

Erik Stafford (Contact Author)

Harvard Business School - Finance Unit ( email )

Boston, MA 02163
United States
617-495-8064 (Phone)
617-496-7357 (Fax)

André F. Perold

Harvard Business School - Finance Unit ( email )

Boston, MA 02163
United States
617-495-6680 (Phone)
617-496-6592 (Fax)

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