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Are catastrophe bonds effective financial instruments in the transport and infrastructure industries? Evidence from international financial markets

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  • Fabio Pizzutilo
  • Elisabetta Venezia

Abstract

We analyse the effectiveness of catastrophe bonds for the financial management of catastrophic risk in the transport and infrastructure industries. We illustrate how these financial instruments are becoming a valuable tool for non-financial firms in the risk management of catastrophic events, supplementing the traditional insurance/reinsurance channel, especially during times of constraints in the insurance industry. We also review cat bond issues sponsored by infrastructure and transport companies, highlighting the usefulness of these structured financial instruments in the management of the catastrophe exposure in these industries. Policy indications are finally given.

Suggested Citation

  • Fabio Pizzutilo & Elisabetta Venezia, 2018. "Are catastrophe bonds effective financial instruments in the transport and infrastructure industries? Evidence from international financial markets," Business and Economic Horizons (BEH), Prague Development Center, vol. 14(2), pages 256-267, April.
  • Handle: RePEc:pdc:jrnbeh:v:14:y:2018:i:2:p:256-267
    DOI: 10.15208/beh.2018.20
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    References listed on IDEAS

    as
    1. World Bank, 2012. "Advancing Disaster Risk Financing and Insurance in ASEAN Member States : Framework and Options for Implementation, Volume 1. Main report," World Bank Other Operational Studies 12627, The World Bank.
    2. repec:fth:geneec:99.01 is not listed on IDEAS
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    5. Henri Louberge & Evis Kellezi & Manfred Gilli, 1999. "Using Catastrophe-Linked Securities to Diversity Insurance Risk: A Financial Analysis of Cat Bonds," Journal of Insurance Issues, Western Risk and Insurance Association, vol. 22(2), pages 125-146.
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    Full references (including those not matched with items on IDEAS)

    More about this item

    Keywords

    Catastrophe bonds; risk management; investment analysis; public investment; infrastructures; transportation;

    JEL classification:

    • G32 - Financial Economics - - Corporate Finance and Governance - - - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill
    • R42 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Transportation Economics - - - Government and Private Investment Analysis; Road Maintenance; Transportation Planning
    • R53 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Regional Government Analysis - - - Public Facility Location Analysis; Public Investment and Capital Stock
    • H54 - Public Economics - - National Government Expenditures and Related Policies - - - Infrastructures

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