WP 2018

WP 2018-02 Reinsurance Versus Securitization of Catastrophe Risk

Posted On March 27, 2018
Categories Working Papers, WP 2018

Download Paper

ABSTRACT: We provide a novel explanation for the low volume of securitization in catastrophe risk transfer using a signaling model. Relative to securitization, reinsurance features lower adverse selection costs because reinsurers possess superior underwriting resources than ordinary capital market investors. Reinsurance premia, however, reflect markups over actuarially fair premia due to the… more »