Using Capital Markets to Develop Private Catastrophe Insurance

Using Capital Markets to Develop Private Catastrophe Insurance

The global catastrophe insurance market exhibits inherent cyclical risks. Disaster-prone countries can improve their protection against catastrophic risk and premium volatility by using capital markets to boost the capacity of the private sector to...

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Bibliographic Details
Main Author: Pollner, John D.
Format: Viewpoint
Language:English
Published: World Bank, Washington, DC 2012
Subjects:
CAPITAL MARKETS
DISASTERS
RISK MANAGEMENT
DISASTER PRONE AREAS
DISASTER INSURANCE
REINSURANCE
BONDS AFFILIATE
BALANCE SHEETS
BONDS
CATASTROPHE COVERAGE
CATASTROPHES
CATASTROPHIC RISKS
COUPON RATE
DEFAULT RISK
FINANCIAL MARKETS
FINANCIAL STRUCTURE
INDEMNITY
INSURABLE RISKS
INSURANCE
INSURANCE CONTRACTS
INSURANCE COVERAGE
INSURANCE INDUSTRIES
INSURANCE INDUSTRY
INSURANCE MARKETS
INSURERS
LIQUIDITY
MARINE INSURANCE
MITIGATION
PREMIUMS
PRICE STABILITY
PRIMARY INSURER
RATES
REINSURANCE COMPANIES
RISK TRANSFER
TREASURY NOTES
Online Access:http://documents.worldbank.org/curated/en/1999/10/438313/using-capital-markets-develop-private-catastrophe-insurance
http://hdl.handle.net/10986/11453
Description
Summary:The global catastrophe insurance market exhibits inherent cyclical risks. Disaster-prone countries can improve their protection against catastrophic risk and premium volatility by using capital markets to boost the capacity of the private sector to absorb and spread the risks -- both domestically and internationally. This Note proposes two mechanisms for more efficient management of catastrophic risk: pooled insurance coverage supported by liquidity and credit enhancement facilities, and hazard-indexed bonds to securitize risk.

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