This file is part of IDEAS, which uses RePEc data


[ Papers | Articles | Software | Books | Chapters | Authors | Institutions | JEL Classification | NEP reports | Search | New papers by email | Author registration | Rankings | Volunteers | FAQ | Blog | Help! ]

Creating insurance markets for natural disaster risk in lower income countries: the potential role for securitization

Author info | Abstract | Publisher info | Download info | Related research | Statistics
Author Info
Jerry R. Skees
Barry J. Barnett
Anne G. Murphy

Additional information is available for the following registered author(s):

Abstract

This article considers the potential for securitizing index-based insurance products that transfer weather and natural disaster risks from lower income countries. It begins with a brief overview explaining why markets for natural disaster risks are important, yet often missing, in lower income countries and a review of some recent activities using index-based weather insurance. Next, we describe how natural disaster risks are handled in higher income countries. These examples, along with the example of an innovative index-based livestock insurance pilot project in Mongolia, illustrate how layers, or tranches, of natural disaster risk can be financed during the product development phase by creating structures similar to the Special Purpose Vehicles used in catastrophe bond, mortgage bond, and the emerging microfinance bond markets. We refer to these investment alternatives as micro-CAT bonds since the principle amounts would be small relative to the existing CAT bond market.

Download Info
To download:

If you experience problems downloading a file, check if you have the proper application to view it first. Information about this may be contained in the File-Format links below. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.

File URL: http://www.emeraldinsight.com/Insight/viewContentItem.do;jsessionid=814B0168369BCD379DCD815EB1829887?contentType=Article&contentId=1784624
File Format: text/html
File Function:
Download Restriction: Cannot be freely downloaded

As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.

Publisher Info
Article provided by Emerald Group Publishing in its journal Agricultural Finance Review.

Volume (Year): 68 (2008)
Issue (Month): 1 (September)
Pages: 151-167
Download reference. The following formats are available: HTML (with abstract), plain text (with abstract), BibTeX, RIS (EndNote, RefMan, ProCite), ReDIF
Handle: RePEc:eme:afrpps:v:68:y:2008:i:1:p:151-167

Contact details of provider:
Web page: http://www.emeraldinsight.com

Order Information:
Postal: Emerald Group Publishing, Howard House, Wagon Lane, Bingley, BD16 1WA, UK
Email:
Web: http://www.emeraldinsight.com/afr.htm

For technical questions regarding this item, or to correct its listing, contact: (Rebecca Forster).

Related research
Keywords: Catastrophe risk; Index insurance; Reinsurance; Socially responsible investing; Weather risks;

Other versions of this item:

References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
  1. Neil A. Doherty, 1997. "Financial Innovation in the Management of Catastrophe Risk," Center for Financial Institutions Working Papers 98-12, Wharton School Center for Financial Institutions, University of Pennsylvania. [Downloadable!]
  2. Jerry R. Skees & Barry J. Barnett, 2006. "Enhancing microfinance using index-based risk-transfer products," Agricultural Finance Review, Emerald Group Publishing, vol. 66(2), pages 235-250, September. [Downloadable!] (restricted)
  3. Dercon, Stefan, 1998. "Wealth, risk and activity choice: cattle in Western Tanzania," Journal of Development Economics, Elsevier, vol. 55(1), pages 1-42, February. [Downloadable!] (restricted)
  4. Goes, Anne & Skees, Jerry, 2003. "Financing Natural Disaster Risk Using Charity Contributions And Ex Ante Index Insurance," 2003 Annual meeting, July 27-30, Montreal, Canada 22188, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association). [Downloadable!]
  5. Hogarth, Robin M & Kunreuther, Howard, 1989. " Risk, Ambiguity, and Insurance," Journal of Risk and Uncertainty, Springer, vol. 2(1), pages 5-35, April.
  6. David Hofman & Patricia Brukoff, 2006. "Insuring Public Finances Against Natural Disasters--A Survey of Options and Recent Initiatives," IMF Working Papers 06/199, International Monetary Fund. [Downloadable!]
  7. Michael Carter & Christopher Barrett, 2006. "The economics of poverty traps and persistent poverty: An asset-based approach," The Journal of Development Studies, Taylor and Francis Journals, vol. 42(2), pages 178-199, February. [Downloadable!] (restricted)
  8. McPeak, John G & Barrett, Christopher B, 2001. " Differential Risk Exposure and Stochastic Poverty Traps among East African Pastoralists," American Journal of Agricultural Economics, American Agricultural Economics Association, vol. 83(3), pages 674-79, August. [Downloadable!] (restricted)
  9. Skees, Jerry & Varangis, Panos & Larson, Donald & Siegel, Paul, 2002. "Can financial markets be tapped to help poor people cope with weather risks ?," Policy Research Working Paper Series 2812, The World Bank. [Downloadable!]
    Other versions:
  10. Rosenzweig, Mark R & Binswanger, Hans P, 1993. "Wealth, Weather Risk and the Composition and Profitability of Agricultural Investments," Economic Journal, Royal Economic Society, vol. 103(416), pages 56-78, January. [Downloadable!] (restricted)
  11. Barnett, Barry J. & Barrett, Christopher B. & Skees, Jerry R., 2008. "Poverty Traps and Index-Based Risk Transfer Products," World Development, Elsevier, vol. 36(10), pages 1766-1785, October. [Downloadable!] (restricted)
  12. Neil A. Doherty, 1997. "Financial Innovation in the Management of Catastrophe Risk," Journal of Applied Corporate Finance, Morgan Stanley, vol. 10(3), pages 84-95. [Downloadable!] (restricted)
Full references

Cited by:
(explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)

  1. Xu, Wei & Odening, Martin & Musshoff, Oliver, 2008. "Optimal Design of Weather Bonds," 2008 Annual Meeting, July 27-29, 2008, Orlando, Florida 6781, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association). [Downloadable!]
Statistics
Access and download statistics

Did you know? IDEAS was launched in September 1997.

This page was last updated on 2009-12-19.

This information is provided to you by IDEAS at the Department of Economics, College of Liberal Arts and Sciences, University of Connecticut using RePEc data on a server sponsored by the Society for Economic Dynamics.