Securitizing the Risks of Climate Change: Institutional Innovations in the Insurance of Catastrophic Risk

Research output: Book/ReportReportResearch

Abstract

The present vulnerability of regions, communities and activities, to changes in the
frequency, intensity and distribution of extreme meteorological conditions presents a
problem that may be complicated by climate change. Society has many different ways
of responding to catastrophic risks and distributing the financial losses. This paper
contrasts different approaches on grounds of efficiency and equity. The main focus is on
securitization: a new mechanism for spreading risks that is of interest to insurance
companies to assure the supply of adequate financial capacity, and also to governments
as the insurers of last resort. The 1997 flood in Poland that amounted to a cost of 3% of
GDP is analysed, and securitization is proposed as a possible alternative to traditional
insurance for ex ante coverage of the risk.
Original languageEnglish
PublisherInternational Institute for Applied Systems Analysis
Publication statusPublished - 1998

Publication series

NameInterim Report

Subject classification (UKÄ)

  • Political Science

Keywords

  • Internationell politik

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