Disaster risk-sharing pools and multi-country catastrophe bonds in Southeast Asia

Kensuke Molnar-Tanaka and Yang-Che Wu

No 356, OECD Development Centre Working Papers from OECD Publishing

Abstract: In face of the increasing frequency and intensity of disasters, the Southeast Asian region’s capacity to finance prevention and response remains limited. Regional risk-sharing pools are one way to enhance financial resilience by creating more diversified portfolios, allowing participating countries to transfer excess risk and retain a manageable level of risk. This paper uses a theoretical framework to discuss such regional disaster risk-sharing pools, focusing on multinational catastrophe bonds. It emphasises the importance of addressing policy challenges related to multi-country issuance of catastrophe bonds, including setting appropriate premiums, using appropriate risk assessment models, and facilitating data co-ordination.

Keywords: catastrophe bonds; disaster risk finance; regional co-operation; Risk pool; Risk sharing; Southeast Asia (search for similar items in EconPapers)
JEL-codes: D53 G1 O53 Q54 (search for similar items in EconPapers)
Date: 2025-06-27
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Persistent link: https://EconPapers.repec.org/RePEc:oec:devaaa:356-en

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