Catastrophe Insurance Market in the Caribbean Region: Market Failures and Recommendations for Public Sector Interventions

31 Pages Posted: 20 Apr 2016

Date Written: January 21, 2003

Abstract

The Caribbean region suffers from a high degree of economic volatility. A history of repeated external and domestic shocks has made economic insecurity a major concern across the region. Of particular concern to all households, especially the poorest segments of the population, is the exposure to shocks that are generated by catastrophic events or natural disasters.

Auffret develops a conceptual framework for risk management and shows that the insurance market for catastrophic risk in the Caribbean region remains a "thin" market characterized by "high" prices and "low" transfer of risk. He analyzes the possible market failures which could explain the lack of development of the catastrophe insurance market. Finally he outlines a set of recommendations for public sector interventions.

This paper - a product of the Economic Policy Sector Unit, Latin America and the Caribbean Region - is part of a larger effort in the region to assess the impacts of catastrophic events on welfare.

Suggested Citation

Auffret, Philippe, Catastrophe Insurance Market in the Caribbean Region: Market Failures and Recommendations for Public Sector Interventions (January 21, 2003). Available at SSRN: https://ssrn.com/abstract=636325

Philippe Auffret (Contact Author)

World Bank ( email )

1818 H Street, N.W.
Washington, DC 20433
United States
+1 202 473 7174 (Phone)

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