A few years ago, the Jamaican government started making an unusual financial bet. It went to investors around the world asking if they'd like to wager on the chances a major hurricane would hit the island in the next couple of years.

In finance terms, these kinds of wagers are called "catastrophe bonds." They're a way to get investors to share the risk of a major disaster, whether that's a Japanese earthquake, a California wildfire, or a Jamaican hurricane.

This market for catastrophe has gotten really hot lately. And it’s changing the way that insurance works for all of us.

Pre-order the Planet Money book and get a free gift. / Subscribe to Planet Money+

Listen free: Apple Podcasts, Spotify, the NPR app or anywhere you get podcasts.

Facebook / Instagram / TikTok / Our weekly Newsletter.

This episode was produced by Willa Rubin and edited by Marianne McCune. It was engineered by Jimmy Keeley and Kwesi Lee. Fact-checking by Sierra Juarez and Vito Emanuel. Alex Goldmark is our executive producer.

Music: Universal Music Production - “Lagos to London,” “Sleazy Does It,” “The Sundown Set.”
Learn more about sponsor message choices: podcastchoices.com/adchoices
NPR Privacy Policy