The Public-Private Sector Risk-Sharing in the French Insurance "Cat. Nat. System"""

Nathalie de Marcellis-Warin and Erwann Michel-Kerjan

CIRANO Working Papers from CIRANO

Abstract: Twenty years ago, the French created a so far unique insurance scheme to cover damages due to natural catastrophes. This so-called ''Cat-Nat system'' combines private insurance industry, a state-guaranteed public reinsurance and the Treasury. We provide a simple game-theoretic model which seems to capture the situation of the concrete scheme. We find that, depending on its expectations, the government modulates its policy to induce private insurers adopting one of those two opposite strategies: (i) transfer all the covered risks to the public reinsurer and therefore simply behave as indemnification intermediaries; (ii) conserve the largest share of high risks. Il y a 20 ans, la France créait un système d assurance des sinistres dus aux catastrophes naturelles qui demeure unique au monde. Le système Cat.Nat est constitué d un partenariat entre l industrie privée de l assurance, un réassureur public et le Ministère des Finances. Nous proposons ici un modèle simple de ce système qui semble refléter concrètement son fonctionnement. Nous montrons que le gouvernement, suivant ses attentes, choisit de moduler sa politique de prise en charge de tels risques afin de conduire les assureurs privés à adopter l une des deux stratégies diamétralement opposées: (i) transférer tous les risques au réassureur public et ainsi se comporter comme de simples intermédiaires financiers; (ii) décider de conserver le plus possible de hauts risques.

Keywords: catastrophe risk-sharing; French insurance system; public-private sector partnership; signaling equilibria; partage de risques catastrophiques; système français d'assurance; partenariat public/privé; équilibres de signal (search for similar items in EconPapers)
JEL-codes: D80 G22 G38 H42 (search for similar items in EconPapers)
Date: 2001-11-01
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (16)

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Persistent link: https://EconPapers.repec.org/RePEc:cir:cirwor:2001s-60

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