Catastrophe Bonds, Spreading Risk PDF Download

Author: United States. Congress. House. Committee on Financial Services. Subcommittee on Oversight and Investigations
Publisher:
ISBN:
Category : Catastrophe bonds
Languages : en
Pages : 288

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Author: United States. Congress
Publisher: Createspace Independent Publishing Platform
ISBN: 9781983634758
Category :
Languages : en
Pages : 286

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Catastrophe bonds, spreading risk : hearing before the Subcommittee on Oversight and Investigations of the Committee on Financial Services, U.S. House of Representatives, One Hundred Seventh Congress, second session, October 8, 2002.

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ISBN:
Category :
Languages : en
Pages :

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Author: Tobias Götze
Publisher: Cuvillier Verlag
ISBN: 3736963785
Category : Business & Economics
Languages : en
Pages : 194

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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: United States Congress House of Represen
Publisher:
ISBN: 9781296009793
Category :
Languages : en
Pages : 290

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This work has been selected by scholars as being culturally important, and is part of the knowledge base of civilization as we know it. This work was reproduced from the original artifact, and remains as true to the original work as possible. Therefore, you will see the original copyright references, library stamps (as most of these works have been housed in our most important libraries around the world), and other notations in the work. This work is in the public domain in the United States of America, and possibly other nations. Within the United States, you may freely copy and distribute this work, as no entity (individual or corporate) has a copyright on the body of the work.As a reproduction of a historical artifact, this work may contain missing or blurred pages, poor pictures, errant marks, etc. Scholars believe, and we concur, that this work is important enough to be preserved, reproduced, and made generally available to the public. We appreciate your support of the preservation process, and thank you for being an important part of keeping this knowledge alive and relevant.

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Category :
Languages : en
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Author: Kenneth A. Froot
Publisher: University of Chicago Press
ISBN: 0226266257
Category : Business & Economics
Languages : en
Pages : 490

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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

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'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: Nico Gysi
Publisher:
ISBN:
Category :
Languages : en
Pages :

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Since the insurance industry was struck by unprecedented high insurance losses caused by natural catastrophes in the early 1990s, the risk perspective of insurance and reinsurance companies regarding the handling of natural disaster risk has changed completely. The industry's ultimate desire to transfer a share of its risk to the capital markets has led to a continuous convergence of insurance and financial markets over the last two decades and the creation of a new asset class: insurance-linked securities. Catastrophe bonds have developed into the most successful instruments to help insurers and reinsurers to control their exposure to natural disaster risk and provided attractive investment options for investors. This paper provides an overview of the cat bond market's evolution, its current role and growth potential within the reinsurance market as well as a recap of previously conducted cat bond studies. The paper's focus is set on the analysis of the cat bond spread's determinants at the time of issuance. The analysis is based on a data sample of more than 300 cat bond transactions between 1997 and 2010 and was conducted using several multiple regression models, which identified the following factors as the key drivers of the cat bond issuance spread: expected loss, trigger structure, bond rating, peril type and the state of the underwriting cycle. The expected loss has the greatest impact on the spread level, with a spread to expected loss multiple of slightly over two. In contrast to findings of previous studies, indemnity trigger structures do not reward investors with higher premium spreads. Instead, the presence of an indemnity trigger structure decreases the cat bond spread by 62 bps. Ratings affect the spread level as expected. The higher the rating is, the lower is the cat bond spread. With regard to the different perils covered by cat bonds, the findings indicate that the spread level is highly sensitive to the cover.

Author: Florian Steiger
Publisher: Independently Published
ISBN:
Category :
Languages : en
Pages : 94

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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.