> But if you buy a bundle of CAT bonds that focus on say California Earthquake, Florida Hurricane, Japanese Typhoon, and a Cyber Event, you can imagine the diversification benefit you get there.

Yeah, but imagine how bad a day you're having if all of those disasters happen at once, and then as a cherry on top you lose all your money.

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itake 11 hours ago | parent [-]

Yeah, it seems like you’d want to buy bonds that covers areas that you’re not personally in…

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richardfey 6 hours ago | parent [-]

Why? It's not like you can influence the trigger of any such catastrophe

	▲	pm215 5 hours ago \| parent [-]
		Same principle as why many people prefer not to own shares in the company that employs them -- you're already heavily exposed to that specific risk and don't want to add more. If you live in Florida then a hurricane in Florida already might mean financial loss for you if it damages your house, so buying a CAT bond that covers a different thing is more diversified risk: you might get "house is trashed" or "bond is total loss" but at least you probably will not get both at once.