CAT Bonds: A Suitable Systemic Approach for Handling Catastrophic Risks in the Czech Republic?
CAT Bonds: A Suitable Systemic Approach for Handling Catastrophic Risks in the Czech Republic?
Author(s): Petra Tisová, Eva Ducháčková, Bohumil StádníkSubject(s): National Economy, Energy and Environmental Studies, Public Finances
Published by: Vysoká škola ekonomická v Praze
Keywords: CAT bonds; insurance; reinsurance; government’s expenditures; catastrophic events;
Summary/Abstract: Catastrophic natural events in the Czech Republic have always caused a considerable burden on public finance. However, this risk can be transferred to capital market investors through CAT bonds, which have never been used for this purpose in the Czech Republic. The paper deals with the theoretical background of CAT bonds, resulting in a back test simulation of a hypothetical CAT bond issued for the period 1999–2003. As a result, by transferring the risk to the capital market, investors could save a significant part of the Czech Republic’s public funds.
Journal: Prague Economic Papers
- Issue Year: 32/2023
- Issue No: 6
- Page Range: 608-627
- Page Count: 20
- Language: English