We can define catastrophic risk: “a large number of people are exposed to the occurrence of peril”. With the passing times, the incidence and severity of catastrophes is increasing. Catastrophes can have serious implications on poor households as they do not have adequate resources to protect themselves from disasters. Major catastrophes can put the whole progress of economy at halt. Therefore, no economy should ever dare to ignore making precise assessments to combat the financial losses of catastrophe. Insurance is one of the approaches to reduce the intensity of effects of catastrophes. For this reason have been specially and financially elaborated cat bond; A catastrophe bond (CAT) is a high-yield debt instrument that is designed to raise money for companies in the insurance industry in the event of a natural disaster. A CAT bond allows the issuer to receive funding from the bond only if specific conditions, such as an earthquake or tornado, occur. If an event protected by the bond activates a payout to the insurance company, the obligation to pay interest and repay the principal is either deferred or completely forgiven. CAT bonds have short maturity dates of between three-to-five years. CAT bonds are a type of insurance-linked security (ILS)—an umbrella term for financial securities that are linked to pre-specified events or insurance-related risks. CAT bonds are paid to insurance companies only if a catastrophe—that is protected by the bond—occurs. Closely related to cat bond, today more than ever, it is possible to speak about pandemic bond. The first pandemic emergency financing bonds, more commonly known as ‘pandemic bonds’, were launched in June 2017 by the World Bank in the wake of the 2014 Ebola outbreak in West Africa. The COVID-19 outbreak, much like the 2008 financial crisis, will threaten the stability and credibility of global financial institutions. Bonds taking coronavirus into the equation have come into the spotlight. Many have been quick to criticize them, but if you look at the longer-term probability of pandemics they could be seen as the start of something with multiple positive uses.
“La finanza ai tempi del Covid 19: rischi catastrofali, cat bond e pandemic bond”, Contributo in atti di Convegno, 3rd UNICART INTERDISCIPLINARY INTERNATIONAL CONFERENCE 17-19 September 2020, Vlorë / Tirana (Albania) PROCEEDINGS BOOK ISBN: 978-2-931089-05-7
Deborah Mola
Membro del Collaboration Group
2020-01-01
Abstract
We can define catastrophic risk: “a large number of people are exposed to the occurrence of peril”. With the passing times, the incidence and severity of catastrophes is increasing. Catastrophes can have serious implications on poor households as they do not have adequate resources to protect themselves from disasters. Major catastrophes can put the whole progress of economy at halt. Therefore, no economy should ever dare to ignore making precise assessments to combat the financial losses of catastrophe. Insurance is one of the approaches to reduce the intensity of effects of catastrophes. For this reason have been specially and financially elaborated cat bond; A catastrophe bond (CAT) is a high-yield debt instrument that is designed to raise money for companies in the insurance industry in the event of a natural disaster. A CAT bond allows the issuer to receive funding from the bond only if specific conditions, such as an earthquake or tornado, occur. If an event protected by the bond activates a payout to the insurance company, the obligation to pay interest and repay the principal is either deferred or completely forgiven. CAT bonds have short maturity dates of between three-to-five years. CAT bonds are a type of insurance-linked security (ILS)—an umbrella term for financial securities that are linked to pre-specified events or insurance-related risks. CAT bonds are paid to insurance companies only if a catastrophe—that is protected by the bond—occurs. Closely related to cat bond, today more than ever, it is possible to speak about pandemic bond. The first pandemic emergency financing bonds, more commonly known as ‘pandemic bonds’, were launched in June 2017 by the World Bank in the wake of the 2014 Ebola outbreak in West Africa. The COVID-19 outbreak, much like the 2008 financial crisis, will threaten the stability and credibility of global financial institutions. Bonds taking coronavirus into the equation have come into the spotlight. Many have been quick to criticize them, but if you look at the longer-term probability of pandemics they could be seen as the start of something with multiple positive uses.I documenti in IRIS sono protetti da copyright e tutti i diritti sono riservati, salvo diversa indicazione.
