Resource information
The Caribbean region suffers from a high
degree of economic volatility. A history of repeated
external and domestic shocks has made economic insecurity a
major concern across the region. Of particular concern to
all households, especially the poorest segments of the
population, is the exposure to shocks that are generated by
catastrophic events or natural disasters. The author
develops a conceptual framework for risk management and
shows that the insurance market for catastrophic risk in the
Caribbean region remains a "thin" market
characterized by "high" prices and "low"
transfer of risk. He analyzes the possible market failures
which could explain the lack of development of the
catastrophe insurance market. Finally he outlines a set of
recommendations for public sector interventions.
