Insurers look to shift costs of a bird flu crisis
Bloomberg News
April 24, 2006

Insurers plan to sell bonds that transfer some of the expenses they would face if there is a bird flu pandemic. Bird flu anticipates the scenario that catastrophe bonds anticipate. A severe pandemic is dfeined as 1.9 million bird flu-related deaths in the U.S. and could incur $133 billion in additional life insruance claims. In 2004 for all daths about $50 billion were paid in claims. Catastrophe bonds are sold to reduce the risk of claims from unusual events such as multiple tornadoes or hurricanes. These bonds are primarily sold to institutions. Proceeds from the sale, after skipping interest and principal payments, are held in trust to meet claims in disasters.