Index-based risk transfer tools for developing nations

ORIGINAL PUBLICATION HERE

Since we began the Artemis blog one of the topics which has interested us, and hopefully our readership, is the innovation occurring in the re/insurance and risk transfer markets as they seek to provide mechanisms for people in developing nations to hedge and protect themselves against weather extremes. The development of products and initiatives which pay for losses based on a an index scale of actual measured weather conditions is the fairest way to do this for farmers and smallholders in countries such as India and Malawi. Searching this blog for terms such as ‘microfinance‘ or ‘micro-insurance‘ will give you a flavour of the coverage we’ve given this topic.

Catastrophe bonds for the financial banking systems

ORIGINAL PUBLICATION HERE

We’ve mentioned in the past the potential for catastrophe bonds to be utilised by the banking systems as a way to protect against the failures we’ve seen due to the global financial meltdown. Now, the International Monetary Fund has published a working paper which suggests exactly that as a possible left-field approach to protecting financial institutions from the risks faced in these times of credit uncertainty and financial market turbulence.