Summary |
Chapter I first examines the characteristics of the global insurance and reinsurance market and its links with Caribbean insurers and policyholders, in order to illustrate the local repercussions of world catastrophe events and their impacts of local industry performance. Chapter II provides an examination of the domestic Caribbean insurance market structure and institutions and their commercial practices in providing protection to different sectors; showing that the current industry structure may in some cases reduce incentive for improving risk underwriting practices and promoting loss reduction.
Chapter III then discusses how structural mitigation and vulnerability reduction measures can prove to be cost effective investments that can dramatically reduce exposure risks on properties. Chapter IV then analyzes the modalities of risk transfer for potential financial losses. This includes the specific structure of reinsurance contracts in the Caribbean and the current sharing between domestic risk retention and international risk transfer.
Chapter V goes on to demonstrate what innovations are being developed for catastrophe risk management, ranging from private securitization of insurance risks to public/private partnerships to increase insurance capacity in constrained market. Chapter VI the examines the options and choices of risk management tools for the ESC and demonstrates that the structuring of inter-country insurance pooling arrangements yields lower aggregate expected losses and improves the leverage provided by risk capital based on the actuarially based exposures to loss, of the individual countries.
Chapter VII concludes by demonstrating the financial feasibility and sustainability of operating and managing catastrophe risks under a sub-regional pool.
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