OECD Journal: Financial Market Trends

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The articles in Financial Market Trends focus on trends, structural issues and developments in financial markets and the financial sector.


Financial instruments for managing disaster risks related to climate change

This article provides an overview of the potential implications of climate change for the financial management of disaster risks. It outlines the contribution of insurance to reducing the economic disruption of disaster events and policy approaches to supporting the penetration of disaster insurance coverage and the capacity of insurance markets to absorb disaster risks, including through the use of capital markets instruments and international co-operation in risk pooling. It concludes with a number of recommendations for improving the financial management of disaster risks in the context of climate change and some areas of further work.

JEL classification: G22, G23, H84, Q54

Keywords: Climate change, natural disasters, extreme events, insurance, reinsurance, catastrophe bonds


H84: Public Economics / Miscellaneous Issues / Disaster Aid;
G23: Financial Economics / Financial Institutions and Services / Pension Funds; Non-bank Financial Institutions; Financial Instruments; Institutional Investors;
Q54: Agricultural and Natural Resource Economics; Environmental and Ecological Economics / Environmental Economics / Climate; Natural Disasters and Their Management; Global Warming;
G22: Financial Economics / Financial Institutions and Services / Insurance; Insurance Companies; Actuarial Studies