Karsten Bromann won't take a vacation this summer. He'll be tracking hurricanes for his hedge fund.
Bromann, a hedge-fund manager at Zurich-based ISPartners Investment Solutions AG, plans to profit from forecasts of more violent storms.
He's snapping up "catastrophe bonds," as insurers sell more of the securities to protect themselves from increasingly unstable weather triggered by global warming.
Companies such as Swiss Reinsurance Co. and Munich Re, which provide insurance for insurers, are seeking new sources of funding after disasters such as Hurricane Katrina produced record claims of more than $90 billion last year. Hedge funds are embracing that risk, lured by yields of as much as 40 percentage points more than investment-grade debt.
Investors forecast sales of catastrophe bonds may triple to $4 billion this year.
"The reinsurance industry is currently in a state of massive dislocation," says Bromann, 40. "Our expert models tell us last year's estimates of hurricane risk need to be raised by 50 percent. That outlook is a great opportunity."

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