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.

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