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|a Geographies of Securitized Catastrophe Risk and the Implications of Climate Change |h [electronic resource]. |
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|a [S.l.] : |b Clark University, |c 2014. |
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|a Please contact the owning institution for licensing and permissions. It is the user's responsibility to ensure use does not violate any third party rights. |
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|a This article analyzes the drivers and implications of
catastrophe bonds’ growing popularity as an alternative
asset class. As investor demand for bonds outpaces
their supply from reinsurers, the study asks
how the place-based physical vulnerabilities of fixed
capital have been rendered into assets deemed
increasingly desirable by growing blocks of financial
capital. Combining data from extended interviews
with industry datasets and market reports, the study
demonstrates how this securitization pathway allows
mobile capital on a search for yield to reframe spatial
liabilities as tradable assets, thus accessing new
“returns on place.” By aggregating and analyzing
data on approximately $37 billion in catastrophe
bond transactions since 1997, the study reveals both
the ongoing concentration of capital in so-called
“peak perils” such as U.S. hurricane and earthquake
risks, and the fragmentation and recombination of
peak perils to create new risk/return profiles. These
purposive, scalable, and selective financial engagements
with catastrophic risks depend upon the avoidance
of the fixed costs and relational entanglements
borne by (re)insurers. This ambivalent relationship
with geographical liabilities is reaching its logical
apogee in recent proposals to expand the catastrophe
bond market to capitalize on growing climate change
risks. This movement to “underwrite to securitize”
intentionally emulates the “originate to securitize”
model pioneered in mortgage-backed securities. This
study argues that such developments could ultimately
yield a built environment that is both more
dependent on the state as an insurer of last resort and
less adapted to climate extremes. |
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|a Electronic reproduction. |c Florida International University, |d 2015. |f (dpSobek) |n Mode of access: World Wide Web. |n System requirements: Internet connectivity; Web browser software. |
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|a dpSobek |c Sea Level Rise |
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|u http://dpanther.fiu.edu/dpService/dpPurlService/purl/FI15052562/00001 |y Click here for full text |
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|a http://dpanther.fiu.edu/sobek/content/FI/15/05/25/62/00001/FI15052562_thm.jpg |
