What if catastrophe damage fails to trigger a parametric insurance program's index, leaving large basis losses?
A catastrophe causes severe damage that a parametric insurance and cat-bond program's index trigger fails to capture, leaving insureds and sponsors with large uninsured basis losses, an IAIS gap nuance.
how we built this number — every step
The class rate is measured from our dated, sourced event library (decade-normalized Poisson — the full table is public at base_rates.json). The variant’s share within its class is the analyst’s editorial call, published so you can audit it. A wider range means thinner precedent. Full recipe: methodology · scored at Reality Check.
The butterfly cascade
How this trigger trickles across markets, left → right — the root shock, its first‑order moves, then the ripple effects. Drag any node; tap a market for its real price history.
Resolution timeline — how this probability is moving
Our model's odds (gold) over time vs the crowd's (Polymarket, blue), from the past toward the 1–3 years horizon. Each dot is a real macro event that nudged the probability — green pushed it up, red pushed it down. Tap a dot for the source. The gold path is an illustrative reconstruction anchored to today's estimate — real dated events, not a live re-estimate history.
What it would mean
If this plays out, it is a risk-off shock. A catastrophe causes severe damage that a parametric insurance and cat-bond program's index trigger fails to capture, leaving insureds and sponsors with large uninsured basis losses, an IAIS gap nuance. The trigger decomposes into signed root‑shocks — Climate/crop supply ▲ · Credit spreads ▲ · Food inflation ▲ · Risk appetite ▼ — which propagate through our causal graph to the markets below.
If it happens — the markets it would move
Biggest moves first. Projected moves are cascade-model priors; hist A–B% = what comparable past events actually did (measured abnormal returns), and model prior · unmeasured marks markets with no analogue backing yet. Tap any market for its price history.
| Market | Class | Projected move | |
|---|---|---|---|
| 1 | MicroStrategy MSTRon Hyperliquid 📈 chart | Equity | ▼ -0.9% hist -2.37–+0.44% · other way +30.07% (n=12) |
| 2 | Solana SOLon Hyperliquid 📈 chart | Crypto | ▼ -0.7% hist -1.48–+0.3% · other way -2.27% (n=10) |
| 3 | Wheat WHEATon Hyperliquid 📈 chart | Commodity | ▲ +0.7% hist -0.4–+1.85% · other way -3.04% (n=12) |
| 4 | Corn CORNon Hyperliquid 📈 chart | Commodity | ▲ +0.7% hist -0.52–+0.75% · other way -1.11% (n=12) |
| 5 | Nasdaq 100 NDXon Hyperliquid 📈 chart | Index | ▼ -0.5% hist -0.42–+0.5% · other way -0.08% (n=12) |
| 6 | Hyperliquid (HYPE) HYPEon Hyperliquid | Crypto | ▼ -0.6% model prior · unmeasured |
| 7 | Volatility (VIX) VIXon Hyperliquid 📈 chart | Vol | ▲ +0.5% hist -2.39–+5.88% · other way -9.24% (n=12) |
| 8 | Bitcoin BTCon Hyperliquid 📈 chart | Crypto | ▼ -0.5% hist -0.91–+0.61% · other way +8.0% (n=10) |
| 9 | Ether ETHon Hyperliquid 📈 chart | Crypto | ▼ -0.5% hist -1.33–+0.95% · other way +3.01% (n=10) |
| 10 | High-yield credit HYG 📈 chart | Rate | ▼ -0.5% hist -0.57–-0.03% · other way -0.41% (n=12) |
| 11 | Semiconductors SMHon Hyperliquid 📈 chart | Equity | ▼ -0.4% hist -0.62–+1.11% · other way +1.08% (n=12) |
| 12 | S&P 500 SPXon Hyperliquid 📈 chart | Index | ▼ -0.4% hist -1.4–+0.45% · other way +0.96% (n=12) |
| 13 | Tech sector XLK 📈 chart | Equity | ▼ -0.4% hist -0.45–+0.66% · other way +0.04% (n=12) |
| 14 | Financials XLF 📈 chart | Equity | ▼ -0.3% hist -0.45–+-0.0% · other way +0.1% (n=12) |
Probable recommendation
Historical precedent — what analogous events actually did
Across 40 analogous events (overlap‑weighted), as abnormal returns — market beta stripped, so it's the event's own effect, not the market backdrop. Shown at 20 days (persistent) and 5 days (immediate); ↺ fades = the two horizons disagree. Confidence = consistency × sample × significance.
| Asset | History says | Abnormal (20d · 5d) | Hit | n | Confidence | vs cascade |
|---|---|---|---|---|---|---|
| NDX NDX | LONG | +0.7% · 5d -0.8% ↺ fades | 61% | 37 | 0.17 | ⚠ differs |
| JPM JPM | SHORT | -0.1% · 5d -0.6% | 59% | 38 | 0.16 | ✓ matches cascade |
| COIN COIN | LONG | +0.1% · 5d +3.8% | 60% | 10 | 0.16 | ⚠ differs |
| MU MU | LONG | +1.0% · 5d -0.7% ↺ fades | 59% | 37 | 0.15 | ⚠ differs |
| NG NG | SHORT | -3.8% · 5d -3.9% | 58% | 36 | 0.15 | ⚠ differs |
| SMH SMH | LONG | +1.2% · 5d -0.6% ↺ fades | 58% | 36 | 0.14 | ⚠ differs |
| High-yield credit HYG | SHORT | -0.3% · 5d +0.0% ↺ fades | 58% | 36 | 0.13 | ✓ matches cascade |
| XLK XLK | LONG | +0.8% · 5d -0.7% ↺ fades | 58% | 36 | 0.13 | ⚠ differs |
| US dollar DXY | LONG | +0.8% · 5d +0.2% | 57% | 40 | 0.13 | · |
| MSTR MSTR | SHORT | -1.8% · 5d -2.4% | 58% | 36 | 0.12 | ✓ matches cascade |
| TSM TSM | SHORT | -0.1% · 5d -1.9% | 58% | 36 | 0.12 | ✓ matches cascade |
| Gold XAU | SHORT | -0.6% · 5d -0.2% | 56% | 36 | 0.11 | · |
| AVGO AVGO | LONG | +2.8% · 5d -1.5% ↺ fades | 56% | 27 | 0.10 | ⚠ differs |
| 10y yield DGS10 | LONG | +0bp · 5d +1bp | 55% | 40 | 0.09 | · |