Article: Spreading, the risk: the capital markets have acquired a healthy appetite for insurance-linked securities as a supplement to traditional reinsurance. Proponents say tightening spreads will elicit further interest in these products. Others are less sanguine.(SPECIAL REPORT: REINSURANCE)

When insurance-linked securities emerged a decade ago, buyers were largely reinsurance companies that took advantage of the opportunity the bonds afforded sponsors to insure themselves against major, natural catastrophes. Reinsurers, and some insurers, also represented the vast majority of the investors in the bonds.

Over the last 10 years, the sponsor base has expanded to include insurers and a smattering of large corporations. At the same time, the range of events covered has broadened from natural catastrophes--largely hurricanes and earthquakes--to the risk of cancellation of the World Cup, industrial casualty and mass death. A whole separate category of the ...

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