In face of the increasing frequency and intensity of disasters, the Southeast Asian region’s capacity to finance prevention and response remains limited. Regional risk-sharing pools are one way to enhance financial resilience by creating more diversified portfolios, allowing participating countries to transfer excess risk and retain a manageable level of risk. This paper uses a theoretical framework to discuss such regional disaster risk-sharing pools, focusing on multinational catastrophe bonds. It emphasises the importance of addressing policy challenges related to multi-country issuance of catastrophe bonds, including setting appropriate premiums, using appropriate risk assessment models, and facilitating data co-ordination.
Disaster risk-sharing pools and multi-country catastrophe bonds in Southeast Asia
