The Financing of Catastrophe Risk
edited by Kenneth A. Froot
University of Chicago Press, 1999
Cloth: 978-0-226-26623-7 | Electronic: 978-0-226-26625-1
DOI: 10.7208/chicago/9780226266251.001.0001
ABOUT THIS BOOKTABLE OF CONTENTS

ABOUT THIS BOOK

Is it possible that the insurance and reinsurance industries cannot handle a major catastrophe? Ten years ago, the notion that the overall cost of a single catastrophic event might exceed $10 billion was unthinkable. With ever increasing property-casualty risks and unabated growth in hazard-prone areas, insurers and reinsurers now envision the possibility of disaster losses of $50 to $100 billion in the United States.

Against this backdrop, the capitalization of the insurance and reinsurance industries has become a crucial concern. While it remains unlikely that a single event might entirely bankrupt these industries, a big catastrophe could place firms under severe stress, jeopardizing both policy holders and investors and causing profound ripple effects throughout the U.S. economy.

The Financing of Catastrophe Risk assembles an impressive roster of experts from academia and industry to explore the disturbing yet realistic assumption that a large catastrophic event is inevitable. The essays offer tangible means of both reassessing and raising the level of preparedness throughout the insurance and reinsurance industries.

TABLE OF CONTENTS

Acknowledgments

Introduction

1. Insurer Demand for Catastrophe Reinsurance

2. Alternative Means of Redistributing Catastrophic Risk in a National Risk-Management System

3. Pricing Excess-of-Loss Reinsurance Contracts against Catastrophic Loss

4. Challenges Facing the Insurance Industry in Managing Catastrophic Risks

5. The Pricing of U.S. Catastrophe Reinsurance

6. Reinsurance for Catastrophes and Cataclysms

7. The Influence of Income Tax Rules on Insurance Reserves

8. Courting Disaster? The Transformation of Federal Disaster Policy since 1803

9. The Moral Hazard of Insuring the Insurers

10. Index Hedge Performance: Insurer Market Penetration and Basis Risk

11. Panel Discussions

Contributors

Author Index

Subject Index