A CAT bond-based coverage scheme proposal for Italy

Lorenzo Hofer, Mariano Angelo Zanini, Paolo Gardoni

Research output: Chapter in Book/Report/Conference proceedingConference contribution

Abstract

Catastrophe bonds (CAT bonds) are risk-linked securities used by the insurance industry to transfer risks associated with the occurrence of natural disasters to the capital markets. Despite their growing importance, relatively few studies on CAT bond pricing, design and their application are available in the literature. Indeed, existing pricing formulations for pricing analysis do not account for uncertainties in model parameters and are not contextualized in a more general CAT bond coverage design procedure for an area of interest with a distributed portfolio. For these reasons, this paper presents a general procedure for designing a CAT bond-based coverage for a spatially distributed portfolio against losses due to natural hazards. The procedure is then applied to a case study represented by the residential building portfolio in Italy, aiming to design a CAT bond-based coverage scheme against losses induced by seismic events all over the entire national borders.

Original languageEnglish (US)
Title of host publication19th ANIDIS Conference, Seismic Engineering in Italy
EditorsGiuseppe Andrea Ferro, Luciana Restuccia
PublisherElsevier B.V.
Pages934-941
Number of pages8
ISBN (Electronic)9781713870418
DOIs
StatePublished - 2022
Event19th ANIDIS Conference, Seismic Engineering in Italy - Turin, Italy
Duration: Sep 11 2022Sep 15 2022

Publication series

NameProcedia Structural Integrity
Volume44
ISSN (Electronic)2452-3216

Conference

Conference19th ANIDIS Conference, Seismic Engineering in Italy
Country/TerritoryItaly
CityTurin
Period9/11/229/15/22

Keywords

  • CAT bond
  • earthquakes
  • losses
  • risk tranfser
  • seismic risk

ASJC Scopus subject areas

  • Civil and Structural Engineering
  • Materials Science(all)
  • Mechanics of Materials
  • Mechanical Engineering

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