Essential read about financing catastrophe risk.

books:


	• The Financing of Catastrophe Risk (National Bureau of Economic Research Project Report) University Of Chicago Press, 1999 - 488 pages average customer review:based on 1 review view larger image
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Essential read about financing catastrophe risk.

This book is an excellent treatment of an issue of increasing importance. As the costs of natural catastrophes continue to increase, the tools available to absorb the increasing costs of loss become more valuable. The book describes the demand for catastrophe insurance protection, the limitations on supply, and alternative mechanisms to shift risk. Of particular interest is the discussion of the capital markets as viable tools to absorb risk. For those concerned with the financing of catastrophe risk, this book is an essential read.

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.

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