A recent study by Kensuke Molnar-Tanaka from the OECD Development Centre and Yang-Che Wu from Feng Chia University delves into the potential benefits of issuing multi-country catastrophe bonds in Southeast Asia to better manage the escalating costs of disasters in the region. While Southeast Asia faces an increasing frequency and intensity of disasters, the conversation around multi-country cat bonds remains limited.
The authors emphasize the importance of strengthening resilience in the face of mounting challenges and propose the adoption of a multi-country framework for catastrophe bond issuance. Drawing parallels with existing risk-sharing pools worldwide, such as the Caribbean Catastrophe Risk Insurance Facility and the Pacific Catastrophe Risk Assessment and Financing Initiative, the study advocates for a more concerted effort towards enhancing disaster risk mitigation through innovative financial instruments.
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