Managing Catastrophic Risk by Alternative Risk Transfer Instruments

  title={Managing Catastrophic Risk by Alternative Risk Transfer Instruments},
  author={Chieh Yang},
Chapter 1 analyzes hybrid-trigger CAT bonds, a new CAT bond deal that can reduce basis risk and eliminate moral hazard simultaneously. It is the first research that provides analytical evidence on the condition under which the hybrid trigger has lower basis risk. Simulation results support my analyses. Major findings in this study provide insights to insurers who would proactively manage the basis risk of CAT bonds. Chapter 2 examines whether the parimutuel mechanism can hedge risk-averse… CONTINUE READING


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