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Risk Awareness, Capital Markets and Catastrophic Risks

image of Risk Awareness, Capital Markets and Catastrophic Risks

The OECD contributes to the improvement of the financial management of major catastrophes both through the activities of the International Network on the Financial Management of Large-Scale Catastrophes and through the leadership of its High-Level Advisory Board. This publication compiles a series of reports reflecting the OECD’s extensive work in this field over recent years. These reports include: 1) a stocktaking of initiatives to promote natural hazard awareness and disaster risk reduction education, resulting in the publication of a policy handbook; 2) a review of and recommendations on catastrophe-linked securities and the role of capital markets in supporting the financial mitigation of large-scale risks, aimed at governments promoting these instruments; 3) a review of current mechanisms used to quantify catastrophe losses within the OECD; and 4) a review of hazard risk mapping efforts in South East Asian countries.

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Development of CAT-linked Securities

We can draw from observations made in chapter six of this report about the nature of natural catastrophe risks and their economic costs, the general conditions for market growth and liquidity in securitised markets and the possible roles of CAT-linked securities, to identify the key drivers of, impediments to, and issues in the development of, a CAT-linked securities market.

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