This paper analyzes risk-linked securities as sources of risk capital for the insurance and reinsurance industries …. Risk-linked securities are innovative financing devices that enable insurance risk to be sold in capital markets, raising … prominent type of risk-linked security is the catastrophic risk (CAT) bond, which is a fully collateralized instrument that pays …

companies? And if such issues influence systemic stability, what design features of the bond and characteristics of the issuing … insurer cause catastrophe bond issues to destabilize the financial sector? Contrary to current conjectures of insurance … a catastrophe bond. We empirically confirm that a higher pre-issue leverage, a higher firm valuation and previous cat …

catastrophe loss data, match them with the defined trigger events of each CAT bond contract, and then employ an empirical pricing … supports that CAT bond markets are successful prediction markets that efficiently aggregate information about future CAT losses …. Our results also highlight that actual CAT losses in future periods can explain the excess CAT bond spreads in the primary …

hypothetical CAT bond issued for the period 1999-2003. As a result, by transferring the risk to the capital market, investors could …

costs but also to natural disaster risks. Costly insurance and charity donation both lead to low insurance purchase. While …