Publication:
Sovereign Natural Disaster Insurance for Developing Countries : A Paradigm Shift in Catastrophe Risk Financing

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dc.contributor.authorGhesquiere, Francis
dc.contributor.authorMahul, Olivier
dc.date.accessioned2012-06-06T20:21:08Z
dc.date.available2012-06-06T20:21:08Z
dc.date.issued2007-09
dc.description.abstractEconomic theory suggests that countries should ignore uncertainty for public investment and behave as if indifferent to risk because they can pool risks to a much greater extent than private investors can. This paper discusses the general economic theory in the case of developing countries. The analysis identifies several cases where the government's risk-neutral assumption does not hold, thus making rational the use of ex ante risk financing instruments, including sovereign insurance. The paper discusses the optimal level of sovereign insurance. It argues that, because sovereign insurance is usually more expensive than post-disaster financing, it should mainly cover immediate needs, while long-term expenditures should be financed through post-disaster financing (including ex post borrowing and tax increases). In other words, sovereign insurance should not aim at financing the long-term resource gap, but only the short-term liquidity need.en
dc.identifierhttp://documents.worldbank.org/curated/en/2007/09/8268122/sovereign-natural-disaster-insurance-developing-countries-paradigm-shift-catastrophe-risk-financing
dc.identifier.doi10.1596/1813-9450-4345
dc.identifier.urihttps://hdl.handle.net/10986/7331
dc.languageEnglish
dc.publisherWorld Bank, Washington, DC
dc.relation.ispartofseriesPolicy Research Working Paper; No. 4345
dc.rightsCC BY 3.0 IGO
dc.rights.holderWorld Bank
dc.rights.urihttp://creativecommons.org/licenses/by/3.0/igo/
dc.subjectACCESS TO INSURANCE
dc.subjectAGENTS
dc.subjectAMOUNT OF RISK
dc.subjectAPPLICATIONS
dc.subjectASSET CLASS
dc.subjectASSET CLASSIFICATION
dc.subjectAVALANCHES
dc.subjectBALANCE SHEET
dc.subjectBALANCE SHEETS
dc.subjectBANK LOAN
dc.subjectBANK POLICY
dc.subjectBASIS POINT
dc.subjectBOND
dc.subjectBOND ISSUER
dc.subjectBOND ISSUES
dc.subjectBOND MARKET
dc.subjectBONDS
dc.subjectBORROWING CAPACITY
dc.subjectBUSINESS INTERRUPTION INSURANCE
dc.subjectCALL OPTION
dc.subjectCAPITAL MARKET
dc.subjectCAPITAL MARKETS
dc.subjectCASH FLOW
dc.subjectCASH FLOWS
dc.subjectCASH PAYMENT
dc.subjectCATASTROPHE BOND
dc.subjectCATASTROPHE BONDS
dc.subjectCATASTROPHES
dc.subjectCATASTROPHIC EVENT
dc.subjectCATASTROPHIC EVENTS
dc.subjectCATASTROPHIC INSURANCE
dc.subjectCATASTROPHIC LOSSES
dc.subjectCATASTROPHIC RISKS
dc.subjectCLAIM PAYMENT
dc.subjectCOMMERCIAL DEBT
dc.subjectCONTINGENT DEBT
dc.subjectCONTINGENT DEBTS
dc.subjectCOST OF CAPITAL
dc.subjectCOUNTRY RISK
dc.subjectCOVERAGE
dc.subjectCREDIT LINE
dc.subjectCREDIT LINES
dc.subjectCREDIT RISK
dc.subjectCREDITORS
dc.subjectDAMAGE ASSESSMENT
dc.subjectDAMAGES
dc.subjectDEBT BURDEN
dc.subjectDEBT OBLIGATIONS
dc.subjectDEBT RESTRUCTURING
dc.subjectDEBT SERVICE
dc.subjectDEBT SERVICES
dc.subjectDERIVATIVE
dc.subjectDERIVATIVE TRANSACTION
dc.subjectDEVASTATION
dc.subjectDEVELOPING COUNTRIES
dc.subjectDISASTER EVENT
dc.subjectDISASTER INSURANCE
dc.subjectDISASTER PRONE COUNTRIES
dc.subjectDISASTER RECONSTRUCTION
dc.subjectDISASTER RECOVERY
dc.subjectDISASTER RISK
dc.subjectDISASTER RISKS
dc.subjectDISASTER SITUATION
dc.subjectDISBURSEMENTS
dc.subjectDISCOUNT RATE
dc.subjectDIVERSIFIED PORTFOLIO
dc.subjectDOMESTIC CREDIT
dc.subjectDOMESTIC DEBT
dc.subjectEARTHQUAKE
dc.subjectEARTHQUAKES
dc.subjectECONOMIC RISK
dc.subjectEMERGENCY ASSISTANCE
dc.subjectEMERGENCY NEEDS
dc.subjectEMERGENCY RECOVERY
dc.subjectEMERGENCY RESPONSE
dc.subjectEMERGING MARKET
dc.subjectEMERGING MARKET COUNTRIES
dc.subjectEXCISE TAXES
dc.subjectEXPENDITURE
dc.subjectEXPENDITURES
dc.subjectEXTERNAL DEBT
dc.subjectEXTERNALITIES
dc.subjectFEDERAL RESERVE
dc.subjectFEDERAL RESERVE BANK
dc.subjectFINANCES
dc.subjectFINANCIAL INSTRUMENT
dc.subjectFINANCIAL INSTRUMENTS
dc.subjectFINANCIAL MARKETS
dc.subjectFINANCIAL SUPPORT
dc.subjectFIRE
dc.subjectFISCAL POLICIES
dc.subjectFLOODING
dc.subjectFLOODS
dc.subjectGOVERNMENT ASSETS
dc.subjectGOVERNMENT BUDGET
dc.subjectGOVERNMENT CAPACITY
dc.subjectGOVERNMENT DEFICIT
dc.subjectGOVERNMENT REVENUE
dc.subjectGROSS DOMESTIC PRODUCT
dc.subjectHOLDING
dc.subjectHOUSING
dc.subjectHURRICANE
dc.subjectHURRICANES
dc.subjectIMPACT OF DISASTER
dc.subjectINDEBTEDNESS
dc.subjectINDEMNITY
dc.subjectINDEMNITY INSURANCE
dc.subjectINFRASTRUCTURE LOANS
dc.subjectINSTITUTIONAL INVESTORS
dc.subjectINSTRUMENT
dc.subjectINSURANCE
dc.subjectINSURANCE CLAIMS
dc.subjectINSURANCE COVERAGE
dc.subjectINSURANCE INDUSTRY
dc.subjectINSURANCE MARKET
dc.subjectINSURANCE MARKETS
dc.subjectINSURANCE PENETRATION
dc.subjectINSURANCE POLICY
dc.subjectINSURANCE PREMIUM
dc.subjectINSURANCE PREMIUMS
dc.subjectINSURANCE PRODUCTS
dc.subjectINSURED LOSSES
dc.subjectINSURERS
dc.subjectINTERNATIONAL BANK
dc.subjectINTERNATIONAL CREDIT
dc.subjectINTERNATIONAL FINANCIAL MARKETS
dc.subjectINVENTORY
dc.subjectLANDSLIDES
dc.subjectLEGISLATION
dc.subjectLEVEL OF DEBT
dc.subjectLEVY
dc.subjectLINES OF CREDIT
dc.subjectLIQUIDITY
dc.subjectLIQUIDITY CONSTRAINT
dc.subjectLIQUIDITY CONSTRAINTS
dc.subjectLIQUIDITY CRISIS
dc.subjectLOAN
dc.subjectLOAN COMMITMENTS
dc.subjectLOCAL BUSINESSES
dc.subjectLONG-TERM RESOURCE
dc.subjectMACROECONOMIC RISK
dc.subjectMARKET INSTRUMENTS
dc.subjectMATURITY
dc.subjectMORAL HAZARD
dc.subjectMUNICIPALITIES
dc.subjectNATURAL DISASTER
dc.subjectNATURAL DISASTERS
dc.subjectNATURAL HAZARDS
dc.subjectNEUTRALITY
dc.subjectOPPORTUNITY COST
dc.subjectOPPORTUNITY COSTS
dc.subjectPLEDGES
dc.subjectPORTFOLIO
dc.subjectPRESENT VALUE
dc.subjectPRINCIPAL PAYMENTS
dc.subjectPRIVATE CAPITAL
dc.subjectPRIVATE INVESTMENTS
dc.subjectPRIVATE INVESTORS
dc.subjectPROGRAMS
dc.subjectPUBLIC ASSETS
dc.subjectPUBLIC EXPENDITURES
dc.subjectPUBLIC FINANCES
dc.subjectPUBLIC INVESTMENT
dc.subjectPUBLIC INVESTMENTS
dc.subjectPUT OPTIONS
dc.subjectRECAPITALIZATION
dc.subjectRECOVERY OPERATION
dc.subjectRECOVERY OPERATIONS
dc.subjectREINSURANCE
dc.subjectREINSURANCE CAPACITY
dc.subjectREINSURANCE COMPANIES
dc.subjectREINSURANCE MARKETS
dc.subjectREINSURERS
dc.subjectRELIEF
dc.subjectRELIEF EFFORTS
dc.subjectRELIEF OPERATION
dc.subjectRELIEF OPERATIONS
dc.subjectREPAYMENT
dc.subjectREPAYMENT OF PRINCIPAL
dc.subjectRESERVE
dc.subjectRESERVE FUND
dc.subjectRESERVE FUNDS
dc.subjectRESERVES
dc.subjectRETURN
dc.subjectRETURNS
dc.subjectRISK ASSESSMENT
dc.subjectRISK AVERSION
dc.subjectRISK CAPITAL
dc.subjectRISK DIVERSIFICATION
dc.subjectRISK EXPOSURE
dc.subjectRISK INSURANCE
dc.subjectRISK MANAGEMENT
dc.subjectRISK MITIGATION
dc.subjectRISK NEUTRAL
dc.subjectRISK PREMIUM
dc.subjectRISK PROFILE
dc.subjectRISK REDUCTION
dc.subjectRISK TRANSFER
dc.subjectSAFETY
dc.subjectSAFETY NET
dc.subjectSAFETY NETS
dc.subjectSECURITIES
dc.subjectSETTLEMENT
dc.subjectSHORT-TERM LIQUIDITY
dc.subjectSMALL BUSINESS
dc.subjectSUB-NATIONAL ENTITIES
dc.subjectSWAP
dc.subjectSYSTEMIC RISK
dc.subjectTAX
dc.subjectTAX ADMINISTRATION
dc.subjectTAXATION
dc.subjectTERM STRUCTURE OF INTEREST RATES
dc.subjectTIDAL WAVES
dc.subjectTOTAL DEBT
dc.subjectTOURISM TAXES
dc.subjectTRANSACTION
dc.subjectTRANSACTION COSTS
dc.subjectTRANSPORT
dc.subjectTREASURY
dc.subjectTREASURY BONDS
dc.subjectTROPICAL STORMS
dc.subjectUNDERLYING ASSET
dc.subjectVOLCANIC ERUPTION
dc.subjectVOLCANIC ERUPTIONS
dc.subjectWEALTH EFFECT
dc.subjectWESTERN EUROPE
dc.subjectWIND SPEED
dc.titleSovereign Natural Disaster Insurance for Developing Countries : A Paradigm Shift in Catastrophe Risk Financingen
dspace.entity.typePublication
okr.crossref.titleSovereign Natural Disaster Insurance For Developing Countries : A Paradigm Shift In Catastrophe Risk Financing
okr.date.doiregistration2025-04-10T10:42:49.699206Z
okr.doctypePublications & Research::Policy Research Working Paper
okr.doctypePublications & Research
okr.docurlhttp://documents.worldbank.org/curated/en/2007/09/8268122/sovereign-natural-disaster-insurance-developing-countries-paradigm-shift-catastrophe-risk-financing
okr.globalpracticeSocial, Urban, Rural and Resilience
okr.globalpracticeEnvironment and Natural Resources
okr.globalpracticeFinance and Markets
okr.guid538391468150588169
okr.identifier.doi10.1596/1813-9450-4345
okr.identifier.externaldocumentum000158349_20070910112223
okr.identifier.internaldocumentum8268122
okr.identifier.reportWPS4345
okr.language.supporteden
okr.pdfurlhttp://www-wds.worldbank.org/external/default/WDSContentServer/WDSP/IB/2007/09/10/000158349_20070910112223/Rendered/PDF/wps4345.pdfen
okr.topicUrban Development::Hazard Risk Management
okr.topicBanks and Banking Reform
okr.topicInsurance and Risk Mitigation
okr.topicEnvironment::Natural Disasters
okr.topicFinance and Financial Sector Development::Debt Markets
okr.unitDevelopment Research Group (DECRG)
okr.volume1 of 1
relation.isSeriesOfPublication26e071dc-b0bf-409c-b982-df2970295c87
relation.isSeriesOfPublication.latestForDiscovery26e071dc-b0bf-409c-b982-df2970295c87
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