Are Catastrophe Bonds Effective Financial Instruments in the Transport and Infrastructure Industries? Evidence from International Financial Markets
Business and Economic Horizons, 14(2), pp. 256-267 (2018)
Posted: 20 Jun 2018
Date Written: April 16, 2018
We analyse the effectiveness of catastrophe bonds for the financial management of catastrophic risk in the transport and infrastructure industries. We illustrate how these financial instruments are becoming a valuable tool for non-financial firms in the risk management of catastrophic events, supplementing the traditional insurance/reinsurance channel, especially during times of constraints in the insurance industry. We also review cat bond issues sponsored by infrastructure and transport companies, highlighting the usefulness of these structured financial instruments in the management of the catastrophe exposure in these industries. Policy indications are finally given.
Keywords: catastrophe bonds, risk management, investment analysis, public investment, infrastructures, transportation
JEL Classification: G32, R42, R53, H54
Suggested Citation: Suggested Citation