Insuring California earthquakes and the role for catastrophe bonds

José Penalva

Economics Working Papers from Department of Economics and Business, Universitat Pompeu Fabra

Abstract: The 1994 Northridge earthquake sent ripples to insurance conpanies everywhere. This was one in a series of natural disasters such as Hurricane Andrew which together with the problems in Lloyd's of London have insurance companies running for cover. This paper presents a calibration of the U.S. economy in a model with financial markets for insurance derivatives that suggests the U.S. economy can deal with the damage of natural catastrophe far better than one might think.

Keywords: Catastrophe bonds; eartquake insurance; calibration; survival analysis (search for similar items in EconPapers)
JEL-codes: D58 G12 G22 (search for similar items in EconPapers)
Date: 2001-01
New Economics Papers: this item is included in nep-fmk
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Persistent link: https://EconPapers.repec.org/RePEc:upf:upfgen:527

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