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Natural catastrohpes and global reinsurance - exploring the linkages

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  • Sebastian von Dahlen
  • Goetz von Peter

Abstract

Natural disasters resulting in significant losses have become more frequent in recent decades, with 2011 being the costliest year in history. Sebastian von Dahlen (International Association of Insurance Supervisors) and Goetz von Peter (BIS) explore how risk is transferred within and beyond the global insurance sector and assess the financial linkages that arise in this process. While most of the risk is retained within the global insurance market, part is transferred through retrocession and securitisation to other financial institutions and the broader financial market. These links appear small, but little is known about who exactly ultimately bears the corresponding risks, as no comprehensive international statistics exist.

Suggested Citation

  • Sebastian von Dahlen & Goetz von Peter, 2012. "Natural catastrohpes and global reinsurance - exploring the linkages," BIS Quarterly Review, Bank for International Settlements, December.
    • Handle: RePEc:bis:bisqtr:1212e
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    References listed on IDEAS

    as
    1. World Bank & United Nations, 2010. "Natural Hazards, UnNatural Disasters : The Economics of Effective Prevention," World Bank Publications - Books, The World Bank Group, number 2512, December.
    2. Dwight M. Jaffee & Thomas Russell, 1996. "Catastrophe Insurance, Capital Markets and Uninsurable Risks," Center for Financial Institutions Working Papers 96-12, Wharton School Center for Financial Institutions, University of Pennsylvania.
    3. Goetz von Peter & Sebastian von Dahlen & Sweta C Saxena, 2012. "Unmitigated disasters? New evidence on the macroeconomic cost of natural catastrophes," BIS Working Papers 394, Bank for International Settlements.
    4. Kunreuther, Howard C. & Michel-Kerjan, Erwann O., 2011. "At War with the Weather: Managing Large-Scale Risks in a New Era of Catastrophes," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262516543, December.
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    Citations

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    Cited by:

    1. Yang‐Che Wu & Ming Jing Yang, 2018. "The effectiveness of asset, liability and equity hedging against catastrophe risk: the cases of winter storms in North America and Europe," European Financial Management, European Financial Management Association, vol. 24(5), pages 893-918, November.
    2. Albuquerque, Pedro H. & Rajhi, Wassim, 2019. "Banking stability, natural disasters, and state fragility: Panel VAR evidence from developing countries," Research in International Business and Finance, Elsevier, vol. 50(C), pages 430-443.
    3. Oliver Kley & Claudia Kluppelberg & Gesine Reinert, 2015. "Conditional risk measures in a bipartite market structure," Papers 1510.00616, arXiv.org.
    4. Wu, Yang-Che, 2015. "Reexamining the feasibility of diversification and transfer instruments on smoothing catastrophe risk," Insurance: Mathematics and Economics, Elsevier, vol. 64(C), pages 54-66.
    5. Jonas Send, 2015. "Climate Notes: Nature Catastrophes and Insurance – Growth and Transformation," ifo Schnelldienst, ifo Institute - Leibniz Institute for Economic Research at the University of Munich, vol. 68(03), pages 41-44, February.
    6. Rajhi, Wassim & Albuquerque, Pedro H., 2017. "Banking stability, natural disasters, and political conflicts: Time series evidence on causality in developing countries," Economics Discussion Papers 2017-52, Kiel Institute for the World Economy (IfW Kiel).
    7. Faias, José Afonso & Guedes, José, 2020. "The diffusion of complex securities: The case of CAT bonds," Insurance: Mathematics and Economics, Elsevier, vol. 90(C), pages 46-57.
    8. Oliver Kley & Claudia Klüppelberg & Gesine Reinert, 2016. "Risk in a Large Claims Insurance Market with Bipartite Graph Structure," Operations Research, INFORMS, vol. 64(5), pages 1159-1176, October.

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    More about this item

    JEL classification:

    • G22 - Financial Economics - - Financial Institutions and Services - - - Insurance; Insurance Companies; Actuarial Studies
    • L22 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Firm Organization and Market Structure
    • Q54 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Climate; Natural Disasters and their Management; Global Warming

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