Hedge funds piled into the reinsurance market after last year's record hurricane season, which inflicted huge losses on the global insurance and reinsurance industries. Sales of CAT (catastrophe) bonds may triple to $4 billion this year. Hurricane Katrina produced record claims of more than $90 billion last year. Cat bonds emerged after Hurricane Andrew devastated the Florida coast in 1992, triggering record losses of $20 billion.

Hedge funds bought the highest risk bonds, those securities carry the highest reward because they cover multiple perils: North Atlantic hurricanes, European windstorms, terrorist related threats, and earthquakes in California and Japan. more here.

Now the National Weather Center's hurricane forecasters predict 13 to 17 named storms this year, three to five of them potentially major hurricanes, defined as Category 3 and above on the scale used to measure the storms. Weather futures specifically tied to Atlantic hurricanes are set to begin trading on the Chicago Mercantile Exchange as soon as the first storm gets brewing according to Forbes.