Question: Can someone answer this please? a) Describe three trigger structures that can be used to activate a payout on a catastrophe bond and in each

Can someone answer this please?

a) Describe three trigger structures that can be used to activate a payout on a catastrophe bond and in each case identify their benefits to one or both counterparties to a cat bond transaction. (12 marks)

b) What are the important macro-issues that affect investors appetite for insurance linked securities? (5 marks)

c) A reinsurer sells a 10 million layer of cover for a insured property portfolio mostly located in Germany, Italy and France. Cover is being provided via a traditional XL contract and she charging 15% rate on line. As a hedge she is evaluating the purchase of 10 million cover from an ILW triggered by European-wide insured losses >20 billion from a winter storm (ILW Premium is 10%). If she undertakes the hedge, what will be her net cash position at time zero? (5 marks)

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