Centro de Documentacion de Fundación MAPFRE - Strengthening local credit markets through lender-level index insurance

MAP20200015826

Strengthening local credit markets through lender-level index insurance / Benjamin L. Collier

Sumario: This article considers lender-level index insurance as a means of expanding access to credit in disaster-prone communities. In this approach, the lender transfers the disaster risk of loans in its portfolio by contracting on an observable measure of the catastrophe. I develop and calibrate a dynamic, stochastic model using data from a community lender in Peru that is vulnerable to El Niñorelated flooding. The modeled lender can insure against El Niño using an index-based product that is available for purchase by financial intermediaries in Peru. I examine how premium rates, basis risk, and background risk may influence the lender's insurance decision and credit supply. Overall, the results suggest that lender-level index insurance holds promise for reducing disaster-related credit supply shocks and expanding credit access in vulnerable communities

En: The Journal of risk and insurance. - Nueva York : The American Risk and Insurance Association, 1964- = ISSN 0022-4367. - 01/06/2020 Volumen 87 Número 2 - junio 2020 , p. 319-349

1. Seguro de crédito . 2. Riesgos extraordinarios . 3. Transferencia de riesgos . 4. Modelo estocástico . 5. Inundaciones . I. Title.