Economist magazine says insurers cover well-off countries
Insurance market mechanisms offer “little succour to poor countries” facing catastrophes such as the Haiti earthquake, the Economist claims
“Insurance payouts cover a much larger chunk of the costs of recovery in rich countries than in poor ones, where few individuals or companies take out disaster cover,” the Economist reports.
Most of the burden of financing reconstruction falls on foreign governments and multilateral agencies. It will be no different in Haiti after the earthquake that struck this month.
Cat bonds for the rich
Munich Re estimates that 80% of cat bonds issued covered risks in America. Francis Ghesquiere of the World Bank doubts that a country as poor as Haiti, with no experience on international bond markets, will start issuing catastrophe bonds.
Haiti is getting a payout of around $8m from the Caribbean Catastrophe Risk Insurance Facility (CCRIF), which came into being in 2007. But Haiti bought more hurricane insurance than earthquake insurance through the CCRIF.
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