CATalytic insurance: the case of natural disasters

Abstract

AbstractInsurance is usually costly, and particularly so for large catastrophic events. Moreover, developing countries have learned to expect assistance from the international community in the event of a natural disaster. Does this imply that the current scarcity of catastrophe insurance is the result of weak demand? Can insurance still play a useful role in the developing world? With the aid of a simple model, we show that insurance bene…ts help enhance …nancially constrained economies to access to private c…