New research published in the Journal of International Economics analysed insurer-assessed losses from 1960 to 2011 to estimate conditional risk transfer. It concludes that growth is reduced by 1-2% following the initial impact, which can increase up to 4% in addition to the initial property and infrastructure damages. The authors argue that without insurance, such losses are non-recoverable; whilst insured losses can conversely stimulate post-disaster growth and mitigate these losses by financing the recovery. The paper emphasises the role of (re)insurance capacity and risk sharing to mitigate the macroeconomic costs of disasters.

 

 

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