The Impact of Climate Change on Catastrophe Risk Model : Implications for Catastrophe Risk Markets in Developing Countries

Seo, John; Mahul, Olivier

dc.creator	Seo, John
dc.creator	Mahul, Olivier
dc.date	2012-03-19T19:10:52Z
dc.date	2012-03-19T19:10:52Z
dc.date	2009-06-01
dc.date.accessioned	2023-02-17T21:10:10Z
dc.date.available	2023-02-17T21:10:10Z
dc.identifier	http://www-wds.worldbank.org/external/default/main?menuPK=64187510&pagePK=64193027&piPK=64187937&theSitePK=523679&menuPK=64187510&searchMenuPK=64187283&siteName=WDS&entityID=000158349_20090608163227
dc.identifier	http://hdl.handle.net/10986/4152
dc.identifier.uri	http://localhost:8080/xmlui/handle/CUHPOERS/245189
dc.description	Catastrophe risk models allow insurers, reinsurers and governments to assess the risk of loss from catastrophic events, such as hurricanes. These models rely on computer technology and the latest earth and meteorological science information to generate thousands if not millions of simulated events. Recently observed hurricane activity, particularly in the 2004 and 2005 hurricane seasons, in conjunction with recently published scientific literature has led risk modelers to revisit their hurricane models and develop climate conditioned hurricane models. This paper discusses these climate conditioned hurricane models and compares their risk estimates to those of base normal hurricane models. This comparison shows that the recent 50 year period of climate change has potentially increased North Atlantic hurricane frequency by 30 percent. However, such an increase in hurricane frequency would result in an increase in risk to human property that is equivalent to less than 10 years worth of US coastal property growth. Increases in potential extreme losses require the reinsurance industry to secure additional risk capital for these peak risks, resulting in the short term in lower risk capacity for developing countries. However, reinsurers and investors in catastrophe securities may still have a long-term interest in providing catastrophe coverage in middle and low-income countries as this allows reinsurers and investors to better diversify their catastrophe risk portfolios.
dc.language	English
dc.relation	Policy Research working paper ; no. WPS 4959
dc.rights	CC BY 3.0 IGO
dc.rights	http://creativecommons.org/licenses/by/3.0/igo/
dc.rights	World Bank
dc.subject	ATLANTIC HURRICANE
dc.subject	ATLANTIC HURRICANES
dc.subject	CASUALTY
dc.subject	CATASTROPHE COVERAGE
dc.subject	CATASTROPHE FUND
dc.subject	CATASTROPHE INSURANCE
dc.subject	CATASTROPHE REINSURANCE
dc.subject	CATASTROPHE RISK FINANCING
dc.subject	CATASTROPHIC EVENTS
dc.subject	CATASTROPHIC RISKS
dc.subject	CLIMATE
dc.subject	CLIMATE CHANGE
dc.subject	COST OF CAPITAL
dc.subject	COST OF INSURANCE
dc.subject	COST OF REINSURANCE
dc.subject	DAMAGES
dc.subject	DEVELOPMENT NETWORK
dc.subject	DISASTER
dc.subject	DISASTER FINANCING
dc.subject	DISASTER REDUCTION
dc.subject	DISASTER RISK
dc.subject	DISASTER RISK REDUCTION
dc.subject	DONOR COMMUNITY
dc.subject	EARTHQUAKE
dc.subject	EARTHQUAKES
dc.subject	ECONOMIC RISKS
dc.subject	HURRICANE
dc.subject	HURRICANE CATASTROPHE
dc.subject	HURRICANE CENTER
dc.subject	HURRICANE DAMAGE
dc.subject	HURRICANE FREQUENCY
dc.subject	HURRICANE INSURANCE
dc.subject	HURRICANE INTENSITY
dc.subject	HURRICANE RISK
dc.subject	HURRICANES
dc.subject	INCOME
dc.subject	INFLATION
dc.subject	INSURANCE
dc.subject	INSURANCE INDUSTRY
dc.subject	INSURANCE MARKET
dc.subject	INSURANCE MARKETS
dc.subject	INSURANCE PREMIUMS
dc.subject	INSURANCE REGULATION
dc.subject	INSURANCE SYSTEMS
dc.subject	INSURED LOSSES
dc.subject	INSURER
dc.subject	INSURERS
dc.subject	INTENSE STORMS
dc.subject	MAJOR HURRICANES
dc.subject	MITIGATION
dc.subject	NATURAL CATASTROPHE
dc.subject	NATURAL DISASTERS
dc.subject	NATURAL HAZARDS
dc.subject	OCCURRENCE OF HURRICANES
dc.subject	POLICY MAKERS
dc.subject	PORTFOLIO
dc.subject	PROBABILITY DISTRIBUTION
dc.subject	PROBABILITY OF OCCURRENCE
dc.subject	PROGRAMS
dc.subject	PROPERTY INSURANCE
dc.subject	RECONSTRUCTION
dc.subject	REINSURANCE BROKER
dc.subject	REINSURANCE CAPACITY
dc.subject	REINSURANCE COMPANIES
dc.subject	REINSURANCE CONTRACT
dc.subject	REINSURANCE MARKETS
dc.subject	REINSURANCE PREMIUMS
dc.subject	REINSURER
dc.subject	REINSURERS
dc.subject	RISK ASSESSMENT
dc.subject	RISK INSURANCE
dc.subject	RISK MANAGEMENT
dc.subject	RISK TRANSFER
dc.subject	SEA SURFACE TEMPERATURE
dc.subject	SECURITIES
dc.subject	STORM
dc.subject	STORMS
dc.subject	TERRORISTS
dc.subject	TRANSACTION COSTS
dc.subject	TROPICAL CYCLONE
dc.subject	TROPICAL CYCLONES
dc.subject	UTILITY FUNCTIONS
dc.title	The Impact of Climate Change on Catastrophe Risk Model : Implications for Catastrophe Risk Markets in Developing Countries
dc.type	Publications & Research :: Policy Research Working Paper
dc.coverage	The World Region
dc.coverage	The World Region