Insuring Public Finances Against Natural Disasters - a Survey of Options and Recent Initiatives

24 Pages Posted: 3 Oct 2006

See all articles by David Hofman

David Hofman

International Monetary Fund (IMF)

Patricia Brukoff

Merrill Lynch & Co.

Date Written: August 2006

Abstract

Natural disasters can put severe strain on public finances, in particular in developing and small countries. But catastrophe insurance markets increasingly offer opportunities for the transfer of such risks. Thus far, developing countries have only tepidly begun to tap these opportunities. More frequent and intensive use of insurance markets may be desirable because it could help introduce an important element of predictability in the post-disaster public finances of disaster-prone developing countries. Against this background, the paper surveys the various available insurance modalities and reviews recent initiatives in developing and emerging market countries. It also identifies some key challenges for the insurance community, donors, and international financial institutions (IFIs).

Keywords: public finances, insurance

JEL Classification: G15, G22, H30, H41, O10, Q54

Suggested Citation

Hofman, David and Brukoff, Patricia, Insuring Public Finances Against Natural Disasters - a Survey of Options and Recent Initiatives (August 2006). IMF Working Paper No. 06/199, Available at SSRN: https://ssrn.com/abstract=934458

David Hofman (Contact Author)

International Monetary Fund (IMF) ( email )

700 19th Street NW
Washington, DC 20431
United States

Patricia Brukoff

Merrill Lynch & Co. ( email )

World Financial Center - North Tower
19th Floor
New York, NY 10281-1319
United States

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