Risk Awareness, Capital Markets and Catastrophic Risks

This publication compiles a series of reports reflecting the OECD’s extensive work in this field over recent years to the improvement of the financial management of major catastrophes both through the activities.



These reports include:
1) a stocktaking of initiatives to promote natural hazard awareness and disaster risk reduction education, resulting in the publication of a policy handbook;
2) a review of and recommendations on catastrophe-linked securities and the role of capital markets in supporting the financial mitigation of large-scale risks, aimed at governments promoting these instruments;
3) a review of current mechanisms used to quantify catastrophe losses within the OECD; and
4) a review of hazard risk mapping efforts in South East Asian countries.

Table of Contents
Part I. Stocktaking Report on Risk Awareness and Education on Natural Catastrophes
Summary.
Introduction
Chapter 1. Analytical Framework
1.1. Definitions
1.2. Importance of awareness and education of risks and risk reduction
1.3. Framework for understanding risk awareness and risk reduction education
1.4. Challenges to risk awareness and risk reduction education
Chapter 2. Stocktaking
2.1. Scope of stocktaking effort
2.2. Review of programmes and assessment by sector
Chapter 3. Conclusion and Next Steps: The Role of Risk Awareness and Risk Reduction Education in Building a Culture of Safety
3.1. Conclusions
3.2. Possible next steps for the OECD
Chapter 4. Policy Recommendations for Enhancing Natural Hazard Risk Awareness and Risk Reduction Education
4.1. The role of key stakeholders in promoting risk awareness and risk reduction education
4.2 Effective tools to enhance risk awareness and risk reduction education
Bibliography
Annex I.A1. Selected Examples of Risk Awareness and Reduction Education Programmes
Part II. Catastrophe-Linked Securities and Capital Markets
Summary.
Chapter 5. Introduction
Chapter 6. Catastrophe Risks and the Role of Capital Markets – A Framework for Analysis
6.1. Nature of natural catastrophe risks, their economic costs, and losses absorbed
6.2. Stages of evolution of risk securitisation in capital markets: framework for analysis
6.3 Possible roles of capital markets and capital market instruments in the transfer of CAT risks
Chapter 7. Overview and Analysis of CAT-linked Securities
7.1. Overview of CAT-linked securities
7.2. Market trends and analysis of the main features of CAT-linked securities
Chapter 8. Development of CAT-linked Securities
8.1. Drivers of the development of CAT-linked securities
8.2. Impediments to the development of CAT-linked securities.
8.3. Issues in the development of CAT-linked securities
Chapter 9. Recommendations for Policy Makers
9.1. Promote the collection and dissemination of high-quality data on CAT risks and losses according to harmonised criteria
9.2. Promote transparency in the CAT-linked securities market
9.3. Consider the opportunity to use CAT-linked securities to transfer a portion of the CAT risk currently borne by governments
9.4. Examine the accounting, solvency and prudential rules governing the CAT-linked securities market to remove any unnecessary impediments
9.5. Encourage research on areas worthy of further investigation
9.6. Encourage further education on CAT-linked securities
Notes
Bibliography