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Financing Losses from Catastrophic Risks: Working Paper 2008-09

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  • Kent Smetters
  • David Torregrosa

Abstract

Catastrophe insurance helps spread risks and increases the ability of policyholders and the economy to recover from both natural disasters and terrorist attacks. Government policies, however, may unintentionally limit the role of the private sector in insuring against catastrophic losses. Several such policies at both the state and the federal level reduce the amount of private capital supplied to insure or hedge against catastrophic risks. One reason is that those policies often become outdated as markets innovate. Policymakers have several different options to increase

Suggested Citation

  • Kent Smetters & David Torregrosa, 2008. "Financing Losses from Catastrophic Risks: Working Paper 2008-09," Working Papers 20400, Congressional Budget Office.
    • Handle: RePEc:cbo:wpaper:20400
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    File URL: https://www.cbo.gov/sites/default/files/110th-congress-2007-2008/workingpaper/working_paper_2008-09_0.pdf
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    References listed on IDEAS

    as
    1. Doherty, N A & Tinic, S M, 1981. "Reinsurance under Conditions of Capital Market Equilibrium: A Note," Journal of Finance, American Finance Association, vol. 36(4), pages 949-953, September.
    2. J. David Cummins, 2008. "CAT Bonds and Other Risk‐Linked Securities: State of the Market and Recent Developments," Risk Management and Insurance Review, American Risk and Insurance Association, vol. 11(1), pages 23-47, March.
    3. Danzon, Patricia M & Harrington, Scott E, 2001. "Worker's Compensation Rate Regulation: How Price Controls Increase Costs," Journal of Law and Economics, University of Chicago Press, vol. 44(1), pages 1-36, April.
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    Cited by:

    1. Menna Hassan & Nourhan Sakr & Arthur Charpentier, 2022. "Government Intervention in Catastrophe Insurance Markets: A Reinforcement Learning Approach," Papers 2207.01010, arXiv.org.

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