Securitizing pandemic‐risk insurance

Securitizing Area Insurance: A Risk Management Approach

This paper examines the possibility of developing a risk management instrument by designing a financial security whose value is linked to the average revenue of a given area. This type of program is sufficiently general to be considered for any group of businesses that face production uncertainty. In agriculture, it has been proposed as an alternative to multiple peril crop insurance programs, ...

SECURITIZING INSURANCE: RISK AVERSION, DIVERSIFICATION AND MARKET EQUILIBRIUM by

Securitizing and tranching longevity exposures

We consider the problem of optimally designing longevity risk transfers under asymmetric information. We focus on holders of longevity exposures that have superior knowledge of the underlying demographic risks, but are willing to take them off their balance sheets because of capital requirements. In equilibrium, they transfer longevity risk to uninformed agents at a cost, where the cost is repr...

Haggling over viruses: the downside risks of securitizing infectious disease.

This article analyses how the 'securitization' of highly pathogenic avian influenza (H5N1) contributed to the rise of a protracted international virus-sharing dispute between developing and developed countries. As fear about the threat of a possible human H5N1 pandemic spread across the world, many governments scrambled to stockpile anti-viral medications and vaccines, albeit in a context where...

Securitizing peanut production risk with catastrophe ( CAT ) bonds

--A catastrophe (CAT) bond is designed for peanut production as a means of transferring natural disaster risks from insurance purveyors to the global capital market. The CAT bond so designed is priced using state-level historical yields for peanut production in the southern part of the United States in the State of Georgia. The index triggering the CAT bond contract was based on percent deviati...