{"id":142333,"date":"2021-10-21T19:59:39","date_gmt":"2021-10-21T14:29:39","guid":{"rendered":"https:\/\/blog.forumias.com\/?p=142333"},"modified":"2021-10-25T09:08:45","modified_gmt":"2021-10-25T03:38:45","slug":"cat-to-the-rescue-govts-insurers-must-issue-catastrophe-bonds-for-citizens-financial-protection-from-weather-events","status":"publish","type":"post","link":"https:\/\/forumias.com\/blog\/cat-to-the-rescue-govts-insurers-must-issue-catastrophe-bonds-for-citizens-financial-protection-from-weather-events\/","title":{"rendered":"Cat to the rescue: Govts, insurers must issue catastrophe bonds for citizens\u2019 financial protection from weather events"},"content":{"rendered":"\n

Synopsis:\u00a0<\/strong>With India prone to disaster activities, there is a need to launch the cat bonds or catastrophe bonds.<\/p>\n

Introduction<\/strong><\/h5>\n

Climate change has an adverse impact on the nature and environment. It led to a lot of devastating activities like floods, fire etc. India is also facing the brunt of these activities.<\/p>\n

National Disaster Management Authority (NDMA)<\/a><\/strong> estimates that 27 states and Union territories are disaster-prone. Under this aspect, there is a need that India should encourage the use of cat bonds.<\/p>\n

What are catastrophe bonds or cat bonds?\u00a0<\/strong><\/h5>\n

Catastrophe bonds or cat bonds provide options for insurers, reinsurers, global corporations and even governments as a way to protect themselves against natural disasters.<\/p>\n\n\n\n
Read more:\u00a0<\/strong>How does the cat bond work<\/a><\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n
What are the benefits of cat bonds?<\/strong><\/h5>\n

Under these bonds, the investors are compensated by a rate of return that is higher than that of normal government or corporate bonds. This helps them get extra returns on investment, which in turn helps them to meet liabilities.<\/p>\n

It is beneficial for both insurers and the government. It offers assurance to the insurer<\/strong> of cash payout to lower premiums and simultaneously offers coverage of extreme events. Governments can get extra cash to spend on relief and rehabilitation\u00a0<\/strong>purposes.<\/p>\n

What should India do?<\/strong><\/h5>\n

Owing to the benefits provided by these bonds, the World Bank<\/strong> provides a cat bond market access facility <\/strong>for member countries. Jamaica, <\/strong>in the past, also issued cat bonds to provide financial protection of up to $185 million against losses from tropical cyclones.<\/p>\n

India, which is a disaster-prone country, should also actively encourage the use of cat bonds.<\/p>\n

Source:\u00a0<\/strong>This post is based on the article “Cat to the rescue: Govts, insurers must issue catastrophe bonds for citizens\u2019 financial protection from weather events”\u00a0<\/strong>published in Times of India\u00a0<\/strong>on\u00a021st October 2021.<\/strong><\/p>\n","protected":false},"excerpt":{"rendered":"

Synopsis:\u00a0With India prone to disaster activities, there is a need to launch the cat bonds or catastrophe bonds. Introduction Climate change has an adverse impact on the nature and environment. It led to a lot of devastating activities like floods, fire etc. India is also facing the brunt of these activities. National Disaster Management Authority… Continue reading Cat to the rescue: Govts, insurers must issue catastrophe bonds for citizens\u2019 financial protection from weather events<\/span><\/a><\/p>\n","protected":false},"author":5480,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"jetpack_post_was_ever_published":false,"footnotes":""},"categories":[1230,9],"tags":[10387,9373,411,8855,216],"class_list":["post-142333","post","type-post","status-publish","format-standard","hentry","category-9-pm-daily-articles","category-public","tag-catastrophe-bonds","tag-climate-financing","tag-disaster-management","tag-disaster-preparedness","tag-gs-paper-3","entry"],"jetpack_featured_media_url":"","views":"","jetpack_sharing_enabled":true,"_links":{"self":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/posts\/142333","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/users\/5480"}],"replies":[{"embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/comments?post=142333"}],"version-history":[{"count":0,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/posts\/142333\/revisions"}],"wp:attachment":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/media?parent=142333"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/categories?post=142333"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/tags?post=142333"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}