Publication:
Catastrophe Risk Management : Using Alternative Risk Financing and Insurance Pooling Mechanisms

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dc.contributor.authorPollner, John D.
dc.date.accessioned2014-08-26T19:32:56Z
dc.date.available2014-08-26T19:32:56Z
dc.date.issued2001-02
dc.description.abstractResidual stochastic risks from catastrophic natural events can be addressed through insurance pooling and risk transfer mechanisms that provide the basis for financial protection and instill strong incentives for reducing vulnerability. To reduce the economic stress after disasters, the author shows, World Bank instruments could be used to support initiaitves to help correct market imperfections in catastrophe insurance. He takes a step-by-step approach to showing how both risk pooling structures and alternative catastrophe coverage mechanisms (long-maturity risk financing facilities, weather-indexed contracts, and capital market instruments) can achieve better risk protection and financing terms--enough to allow the expansion of insurance coverage of public assets and private property. The author examines the insurable assets (private and public) in eight countries in the easternmost part of the Caribbean and, by quantifying the portion of the premium and risk used to fund catastrophe losses, shows that through pooling and the use of credit-type instruments for catastrophe coverage, governments and uninsured property owners or enterprises (with insurable assets) could expect to improve their terms of coverage. Neither local insurers nor reinsurers would suffer in profitability. The risk management options the author examines could lead to real benefits for all participants (buyers and sellers) in insurance markets. But four factors are essential for ensuring the integrity of any participatory insurance scheme for providing risk management in disaster-prone areas such as the Caribbean: 1) stronger regulatory requirements and supervision in the insurance sector; 2) Broad-based, pooled catastrophe funding structures with efficient risk transfer tools; 3) Public insurance policies linked to programs for loss reduction in uninsured sectors; and 4) Stronger risk assessment and enforcement of such structural measures as zoning and compliance with building codes.en
dc.identifierhttp://documents.worldbank.org/curated/en/2001/02/1047385/catastrophe-risk-management-using-alternative-risk-financing-insurance-pooling-mechanisms
dc.identifier.urihttps://hdl.handle.net/10986/19706
dc.languageEnglish
dc.language.isoen_US
dc.publisherWorld Bank, Washington, DC
dc.relation.ispartofseriesPolicy Research Working Paper;No. 2560
dc.rightsCC BY 3.0 IGO
dc.rights.urihttp://creativecommons.org/licenses/by/3.0/igo/
dc.subjectACCOUNTING
dc.subjectACCOUNTING PRINCIPLES
dc.subjectANNUITY
dc.subjectAPPLICATIONS
dc.subjectATTACHMENT POINT
dc.subjectBALANCE SHEETS
dc.subjectBONDS
dc.subjectCAPITAL BASE
dc.subjectCAPITAL MARKETS
dc.subjectCAPITAL REQUIREMENT
dc.subjectCATASTROPHE COVERAGE
dc.subjectCATASTROPHE REINSURANCE
dc.subjectCATASTROPHES
dc.subjectCATASTROPHIC RISKS
dc.subjectCOMMISSIONS
dc.subjectCONSOLIDATION
dc.subjectCONTRACTUAL SAVINGS
dc.subjectDEBT
dc.subjectDISASTERS
dc.subjectEASTERN CARIBBEAN CENTRAL BANK
dc.subjectECONOMIES OF SCALE
dc.subjectFINANCIAL ASSETS
dc.subjectFINANCIAL INSTRUMENTS
dc.subjectFINANCIAL MANAGEMENT
dc.subjectFINANCIAL MARKETS
dc.subjectFINANCIAL RISK
dc.subjectFINANCIAL SECTOR
dc.subjectFINANCIAL STRUCTURE
dc.subjectGUARANTY FUNDS
dc.subjectINDEMNITY
dc.subjectINSURABLE ASSETS
dc.subjectINSURANCE
dc.subjectINSURANCE COMPANIES
dc.subjectINSURANCE COVERAGE
dc.subjectINSURANCE INDUSTRIES
dc.subjectINSURANCE INDUSTRY
dc.subjectINSURANCE MARKETS
dc.subjectINSURANCE POLICIES
dc.subjectINSURANCE RATES
dc.subjectINSURANCE RESERVES
dc.subjectINSURANCE RISK
dc.subjectINSURANCE SUPERVISORS
dc.subjectINSURANCE SYSTEM
dc.subjectINSURERS
dc.subjectINTEGRITY
dc.subjectINTERNATIONAL FINANCE
dc.subjectINTERNATIONAL FINANCIAL MARKETS
dc.subjectINVESTMENT BANKERS
dc.subjectLOW INCOME
dc.subjectMARKET FORCES
dc.subjectMARKET INCENTIVES
dc.subjectMINISTRIES OF FINANCE
dc.subjectMITIGATION
dc.subjectMORAL HAZARDS
dc.subjectPOLICY RESEARCH
dc.subjectPOLICYHOLDERS
dc.subjectPREMIUMS
dc.subjectPRESENT VALUE
dc.subjectPRIMARY INSURER
dc.subjectPRIVATE SECTOR
dc.subjectPROBABILITY OF DEFAULT
dc.subjectPROFITABILITY
dc.subjectPROGRAMS
dc.subjectPROPERTY INSURANCE
dc.subjectPROPERTY RISK
dc.subjectPUBLIC INSURANCE
dc.subjectREGULATORY FRAMEWORK
dc.subjectREINSURANCE
dc.subjectREINSURANCE CONTRACT
dc.subjectREINSURANCE CONTRACTS
dc.subjectREINSURANCE MARKETS
dc.subjectREINSURERS
dc.subjectRISK ASSESSMENT
dc.subjectRISK ASSESSMENTS
dc.subjectRISK INSURANCE
dc.subjectRISK MANAGEMENT
dc.subjectRISK REDUCTION
dc.subjectRISK SHARING
dc.subjectRISK TRANSFER
dc.subjectRISK UNDERWRITING
dc.subjectSECURITIES
dc.subjectSECURITIZATION
dc.subjectSELF INSURANCE
dc.subjectSOLVENCY
dc.subjectSOLVENCY REQUIREMENTS
dc.subjectSUSTAINABILITY
dc.subjectUNDERWRITING
dc.titleCatastrophe Risk Management : Using Alternative Risk Financing and Insurance Pooling Mechanismsen
dspace.entity.typePublication
okr.date.disclosure2001-02-28
okr.doctypePublications & Research::Policy Research Working Paper
okr.doctypePublications & Research
okr.docurlhttp://documents.worldbank.org/curated/en/2001/02/1047385/catastrophe-risk-management-using-alternative-risk-financing-insurance-pooling-mechanisms
okr.globalpracticeFinance and Markets
okr.globalpracticeGovernance
okr.globalpracticeHealth, Nutrition, and Population
okr.guid971331468741307868
okr.identifier.doi10.1596/1813-9450-2560
okr.identifier.externaldocumentum000094946_01032007445639
okr.identifier.internaldocumentum1047385
okr.identifier.reportWPS2560
okr.language.supporteden
okr.pdfurlhttp://www-wds.worldbank.org/external/default/WDSContentServer/WDSP/IB/2001/03/30/000094946_01032007445639/Rendered/PDF/multi0page.pdfen
okr.region.geographicalCaribbean
okr.sectorFinancial Sector Development
okr.sectorFinance
okr.topicFinance and Financial Sector Development::Non Bank Financial Institutions
okr.topicInsurance and Risk Mitigation
okr.topicBanks and Banking Reform
okr.topicHealth Economics and Finance
okr.topicLaw and Development::Insurance Law
okr.topicHealth, Nutrition and Population
okr.unitFinance, Private Sector, and Infrastructure Sector Unit, Latin America and the Caribbean Region
okr.volume1
relation.isAuthorOfPublicationb0f82774-24d9-5275-98e8-aae3f2ccab7e
relation.isAuthorOfPublication.latestForDiscoveryb0f82774-24d9-5275-98e8-aae3f2ccab7e
relation.isSeriesOfPublication26e071dc-b0bf-409c-b982-df2970295c87
relation.isSeriesOfPublication.latestForDiscovery26e071dc-b0bf-409c-b982-df2970295c87
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