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Picking up nickels in front of hurricanes

Investors and pension funds are lining up to buy catastrophe bonds, but they should tread carefully

Expect the unexpected. Sales of catastrophe bonds hit $1.6bn in the first quarter, according to adviser Willis Capital Markets, stoking predictions of a record year for issuance.

These bonds are sold by insurers and absorb losses in the event of natural disasters such as earthquakes or hurricanes.

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