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Author: Florian Steiger Publisher: Independently Published ISBN: Category : Languages : en Pages : 94
Book Description
Investors across the globe are struggling to generate returns in a world of sub-zero interest rates. Macroeconomic events have the potential to shock financial markets from equities to corporate or government bonds alike. The traditional methods of portfolio diversification are failing in a world characterized by unprecedented liquidity injections from central banks. Cat bonds offer a viable alternative: Their performance is linked to the occurrence of natural catastrophes, such as hurricanes or earthquakes, instead of corporate profits or stock market sentiment. Family offices and leading institutional investors are shifting billions of assets into these little-known instruments thus effectively becoming competitors to the traditional providers of reinsurance coverage. With steady returns of more than 7% per annum over the past twenty years, cat bonds have proven their resilience many times. This book takes the reader through the history of the asset class, outlines the basic structure and economics before demonstrating the benefit of adding a cat bond allocation to a traditional multi-asset portfolio.
Author: Florian Steiger Publisher: Independently Published ISBN: Category : Languages : en Pages : 94
Book Description
Investors across the globe are struggling to generate returns in a world of sub-zero interest rates. Macroeconomic events have the potential to shock financial markets from equities to corporate or government bonds alike. The traditional methods of portfolio diversification are failing in a world characterized by unprecedented liquidity injections from central banks. Cat bonds offer a viable alternative: Their performance is linked to the occurrence of natural catastrophes, such as hurricanes or earthquakes, instead of corporate profits or stock market sentiment. Family offices and leading institutional investors are shifting billions of assets into these little-known instruments thus effectively becoming competitors to the traditional providers of reinsurance coverage. With steady returns of more than 7% per annum over the past twenty years, cat bonds have proven their resilience many times. This book takes the reader through the history of the asset class, outlines the basic structure and economics before demonstrating the benefit of adding a cat bond allocation to a traditional multi-asset portfolio.
Author: United States. Congress. House. Committee on Financial Services. Subcommittee on Oversight and Investigations Publisher: ISBN: Category : Catastrophe bonds Languages : en Pages : 288
Author: Kenneth A. Froot Publisher: University of Chicago Press ISBN: 0226266257 Category : Business & Economics Languages : en Pages : 490
Book Description
Is it possible that the insurance and reinsurance industries cannot handle a major catastrophe? Ten years ago, the notion that the overall cost of a single catastrophic event might exceed $10 billion was unthinkable. With ever increasing property-casualty risks and unabated growth in hazard-prone areas, insurers and reinsurers now envision the possibility of disaster losses of $50 to $100 billion in the United States. Against this backdrop, the capitalization of the insurance and reinsurance industries has become a crucial concern. While it remains unlikely that a single event might entirely bankrupt these industries, a big catastrophe could place firms under severe stress, jeopardizing both policy holders and investors and causing profound ripple effects throughout the U.S. economy. The Financing of Catastrophe Risk assembles an impressive roster of experts from academia and industry to explore the disturbing yet realistic assumption that a large catastrophic event is inevitable. The essays offer tangible means of both reassessing and raising the level of preparedness throughout the insurance and reinsurance industries.
Author: J. David Cummins Publisher: World Bank Publications ISBN: 0821377361 Category : Political Science Languages : en Pages : 299
Book Description
'Catastrophe Risk Financing in Developing Countries' provides a detailed analysis of the imperfections and inefficiencies that impede the emergence of competitive catastrophe risk markets in developing countries. The book demonstrates how donors and international financial institutions can assist governments in middle- and low-income countries in promoting effective and affordable catastrophe risk financing solutions. The authors present guiding principles on how and when governments, with assistance from donors and international financial institutions, should intervene in catastrophe insurance markets. They also identify key activities to be undertaken by donors and institutions that would allow middle- and low-income countries to develop competitive and cost-effective catastrophe risk financing strategies at both the macro (government) and micro (household) levels. These principles and activities are expected to inform good practices and ensure desirable results in catastrophe insurance projects. 'Catastrophe Risk Financing in Developing Countries' offers valuable advice and guidelines to policy makers and insurance practitioners involved in the development of catastrophe insurance programs in developing countries.
Author: Tobias Götze Publisher: Cuvillier Verlag ISBN: 3736963785 Category : Business & Economics Languages : en Pages : 194
Book Description
Due to the increasing relevance of natural catastrophes as a significant global source of risk and the capacity constraints in primary insurance and reinsurance markets, CAT bonds have become an important instrument to manage catastrophe risks by transferring them to the capital market. In three empirical studies, this dissertation examines the challenges related to catastrophe risk management with CAT bonds. First, the factors that influence the substitution of traditional reinsurance by CAT bonds are identified. These factors consist of the insured risk layer and the extends of reinsurer default risk, basis risk, and asymmetric information. Second, the accessibility of the CAT bond market for (re)insurance companies is analyzed and the results exhibit the existence of barriers to market entry in the form of higher premiums being paid by less reputable and financially weaker CAT bond sponsors. The third empirical study shows that CAT bond sponsors are susceptible to moral hazard, but also that moral hazard can be successfully prevented by sufficient loss retention or by the use of non-indemnity CAT bonds. Altogether, this dissertation contributes to improving the understanding of the CAT bond market and the challenges of catastrophe risk management using CAT bonds.
Author: Stephan Dieckmann Publisher: ISBN: Category : Languages : en Pages : 43
Book Description
This paper re-examines to which extent catastrophe bond prices can be explained via investor preferences. I show that cat bond spreads equal between two and three times expected losses after controlling for bond-specific characteristics. At the occurrence of Katrina, the model predicts a 15-20% increase in the cost of capital of reinsurance companies and plausible degrees of comovement among different perils. The driving force behind the model is a habit process, in that catastrophes are rare economic shocks that could bring investors closer to their subsistence level. Such preferences may also explain why catastrophe bonds offer higher yield spreads compared to equally-rated corporate bonds.
Author: Alex Krutov Publisher: ISBN: 9781904339564 Category : Insurance Languages : en Pages : 480
Book Description
Information on the types of these securities and the issues involved in their structuring, pricing, trading, and managing on a portfolio basis.
Author: Kirsten Mitchell-Wallace Publisher: John Wiley & Sons ISBN: 1118906071 Category : Science Languages : en Pages : 473
Book Description
This book covers both the practical and theoretical aspects of catastrophe modelling for insurance industry practitioners and public policymakers. Written by authors with both academic and industry experience it also functions as an excellent graduate-level text and overview of the field. Ours is a time of unprecedented levels of risk from both natural and anthropogenic sources. Fortunately, it is also an era of relatively inexpensive technologies for use in assessing those risks. The demand from both commercial and public interests—including (re)insurers, NGOs, global disaster management agencies, and local authorities—for sophisticated catastrophe risk assessment tools has never been greater, and contemporary catastrophe modelling satisfies that demand. Combining the latest research with detailed coverage of state-of-the-art catastrophe modelling techniques and technologies, this book delivers the knowledge needed to use, interpret, and build catastrophe models, and provides greater insight into catastrophe modelling’s enormous potential and possible limitations. The first book containing the detailed, practical knowledge needed to support practitioners as effective catastrophe risk modellers and managers Includes hazard, vulnerability and financial material to provide the only independent, comprehensive overview of the subject, accessible to students and practitioners alike Demonstrates the relevance of catastrophe models within a practical, decision-making framework and illustrates their many applications Includes contributions from many of the top names in the field, globally, from industry, academia, and government Natural Catastrophe Risk Management and Modelling: A Practitioner’s Guide is an important working resource for catastrophe modelling analysts and developers, actuaries, underwriters, and those working in compliance or regulatory functions related to catastrophe risk. It is also valuable for scientists and engineers seeking to gain greater insight into catastrophe risk management and its applications.
Author: Stefan Hochrainer Publisher: Springer Science & Business Media ISBN: 3835094416 Category : Business & Economics Languages : en Pages : 213
Book Description
Stefan Hochrainer develops a catastrophe risk management model. It illustrates which trade-offs and choices a country must make in managing economic risks due to natural disasters. Budgetary resources are allocated to pre-disaster risk management strategies to reduce the probability of financing gaps. The framework and model approach allows cross country comparisons as well as the assessment of financial vulnerability, macroeconomic risk, and risk management strategies. Three case studies demonstrate its flexibility and coherent approach.
Author: Florian Steiger
Author: Florian Steiger
Author: United States. Congress. House. Committee on Financial Services. Subcommittee on Oversight and Investigations
Author: Kenneth A. Froot
Author: J. David Cummins
Author: Tobias Götze
Author: Stephan Dieckmann
Author: Alex Krutov
Author: Kirsten Mitchell-Wallace
Author: Stefan Hochrainer
Author: G. Woo