Posts Tagged ‘Captial Adequacy’

Enhancing Financial Services through Portfolio-Level Disaster Insurance

Written by admin on July 25, 2012. Posted in Climate Change, Financial Institutions, Parametric Insurance, Peru

Benjamin Collier and Jerry Skees recently published an article in the journal Natural Hazards documenting their work with financial intermediaries in Peru entitled, “Enhancing Financial Services through Portfolio-Level Disaster Insurance.” Here is a link to the publication on SpringerLink and its abstract is below. A prior version of the paper is also available in our library, click here.



Financial intermediaries [FIs] in developing and emerging economies are poorly equipped to manage natural disasters. These events create losses for FIs, eroding capital reserves and compromising their ability to lend. Portfolio-level insurance against disasters can improve FI management of these events. We model microfinance intermediaries [MFIs] exposed to severe El Niño in Peru that can now insure against this disaster risk. Our analyses suggest that insurance allows these lenders to manage this risk more efficiently and effectively. is ebay site down right now . These risk management improvements can translate into better financial performance, expansion of banking service outreach, lower interest rates, and reduced volatility in access to credit. Based on these analyses, a large MFI in Peru with which we collaborated is now managing its disaster risk using El Niño insurance