Faculty of Business Economics Bijeljina, Republic of Srpska, Bosnia and Herzegovina
Bosnia and Herzegovina


Catastrophic events caused by natural disasters and human activities pose a unique challenge for insurers, because they make it difficult to estimate expected claims and can cause disruption to the insurance market and impose significant costs on government, businesses and individuals. The lack of available coverage of these risks in the market, due to the insolvency or unwillingness of insurers to ensure catastrophic events, can significantly impede the economic recovery and development of the country. For this reason insurers have sought alternative ways of covering these extreme losses, and one of them, a transfer of the risk of insurance to the capital markets represents the main subject of this research. The aim of this maneuver is to present the advantages and disadvantages of the instruments through which the transfer of insurance risk to financial markets is carried out, as well as to indicate the legal and other assumptions necessary for the functioning and development of this market.


Full Text


American Academy of Actuaries.(1999). Evaluating the Effectiveness of Index-Based Insurance Derivatives in Hedging Property/Casualty Insurance Transactions. Report of the Index Securitization Task Force.Washington, DC.

American Risk and Insurance Association. (2007). Capital Market Instruments for Catastrophe Risk Financing Annual Meeting in Quebec City. Canada.

Banks, E. (2004). Alternative Risk Transfer. Integrated Risk Management through Insurance.Reinsurance and the Capital Markets. John Wiley & Sons Ltd.

Briys, E., and Varenne, F. (2001). Insurance from underwriting to derivatives. Wiley. 1 edition.

Bruggeman, V. (2001). Capital Market Instruments for Catastrophe Risk Financing, American Risk and Insurance Association 2007 Annual Meeting in Quebec City. Canada.

Carayannopoulos, P., Kovacs P., et al. (2003). Insurance Securitization. Catastrophic event exposure and the role of insurance linked securities in addressing risk, Institute for Catastrophic Loss Reduction.

Cummins D. and Weiss M. A. (2009). Convergence of insurance and financial markets: hybrid and securitized risk-transfer solutions. The Journal of Risk and Insurance, Vol. 76, No. 3, DOI: 10.1111/j.1539-6975.2009.01311.x J.

Cummins, J. D. i Geman H. (1995). “Pricing Insurance Catastrophe Futures and Call Spreads: An Arbitrage Approach,” Journal of Fixed Income, 4: 46-57.

EPRS. (2018). Common rules and new framework for securitisation. EU Legislation in Progress.

Hammer V. and Singer A. (2001). Insurance derivatives: a tax angle. Journal of Taxation of Financial Products. (приступљено 20.4.2018).приступљено 20.4.2018).

IAIS. (2003). Issues paper on non-life insurance securitisation, Taken note of in Singapore.

Kovacs, P. and Kunreuther, H. (2001). “Managing Catastrophic Risk: Lessons from Canada,” Institute for Catastrophic Loss Reduction, Paper Series No.13.

Laurenzano, V. L. (1998). Securitization of Insurance Risk: A Perspective for Regulators. Journal of Insurance Regulation, Vol. 17, No.2.

Maes S., Schoutens W. (2012). Contingent Capital: An In-Depth Discussion, Economic Notes by Banca Monte dei Paschi di Siena SpA, vol. 41, no. 1/2-2012.

Martínez Torre-Enciso I., Laye J. E. (2001). Financing catastrophe risk in the capital markets, Int. J. Emergency Management, Vol. 1, No. 1.

McDonald R. L. (2011). “Contingent Capital with a Dual Price Trigger,” (приступљено 11.4.2018.године).

McGhee, C., Faust, J. et al. (2005). The Growing Appetite for Catastrophe Risk: The Catastrophe Bond Market at Year-End 2004. Guy Carpenter&Company, Inc.

NAIC. (2001). Special purpose reinsurance vehicle model act, (приступљено 1.4.2018).

NAIC. (2002). Protected cell company model act, (приступљено 1.4.2018).

Peter Carayannopoulos. (2003). Insurance Securitization Catastrophic event exposure and the role of insurance linked securities in addressing risk. Wilfrid Laurier University.

Shang K. (2013). Understanding Contingent Capital. Casualty Actuarial Society.

Swiss Re. (2011). The fundamentals of insurance-linked securities.приступљено 20.4.2018).

The National Association of Insurance Commissioners (NAIC). (2018). Insurance-linked securities: catastrophe bonds, sidecars and life insurance securitization, (приступљено 20.4.2018).

Митрашевић М. (2010). Актуарска и финансијска анализа адекватности капитала компанија за неживотна (докторска дисертација). Економски факултет Београд.