Insuring California Earthquakes and the Role for Catastrophe Bonds

Abstract

This article examines the economic impact of a major California earthquake, by focusing on the catastrophic damage to residential real estate. It asserts that the damage, although substantial, would be small relative to the U.S. GNP. The author also asserts that the risk can be optimally allocated through reasonably priced insurance contracts and well‐functioning insurance derivative markets.

Citation

PENALVA ZUASTI, J.S. (2002), "Insuring California Earthquakes and the Role for Catastrophe Bonds", Journal of Risk Finance, Vol. 3 No. 4, pp. 54-72. https://doi.org/10.1108/eb043500