Innovative Financial Instruments for Natural Disaster Risk Management
AbstractThis technical paper provides us with an in-depth explanation of how losses due to catastrophes are insured and who absorbs the costs of compensating the insured assets. In the absence of an effective insurance market, the government often becomes the de facto financier of postdisaster rehabilitation efforts. Alternatively, governments can encourage the local insurance industry to engage in risk financing arrangements through insurance pools that, in turn, may cover higher exposures in the global reinsurance and capital markets. This study takes a closer look at how this type of international risk financing scheme might be developed. This paper is an insider's primer on insurance, reinsurance and new capital market instruments that make it possible to continue to respond to the impacts of recurrent natural disasters.
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Bibliographic InfoPaper provided by Inter-American Development Bank in its series IDB Publications with number 30738.
Date of creation: Dec 2002
Date of revision:
Disasters; Financial Markets; Financial Risk; Environment; natural disaster; risk management;
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