Some Aspects of the Economics of Catastrophe Risk Insurance
26 Pages Posted: 17 Feb 2005
Date Written: February 2005
The ability to share risk efficiently in the economy is essential to welfare and growth. However, the increased frequency of natural catastrophes over the last decade has raised once again questions associated to the limits of insurability in a free-market economy, and to the relevance of public interventions on risk-sharing markets. In this paper, we explore the potential reasons for the lack of insurance specifically associated to catastrophe environmental risks. Our final aim is to link each source of possible market inefficiency to its possible remedies.
JEL Classification: D52
Suggested Citation: Suggested Citation