Financial Protection Against Catastrophic Risks

Increasing damages and losses from large-scale catastrophe risks such as natural hazards and cyber attacks are impacting the availability of affordable insurance coverage. This is forcing governments to increase their focus on addressing the resulting protection gaps. This report aims to support policymakers and regulators in building financial resilience to catastrophe risks. It introduces a framework for evaluating the need and best approach to offering government-supported financial protection for large-scale catastrophe risks. It then applies the framework to a set of large-scale risks, including natural hazards, cyber and infectious disease risks. It also examines the particular challenges in the availability of affordable insurance coverage for two types of natural hazards, wildfires and floods, and the different approaches to addressing those challenges.