Governments must ‘stop distorting cat markets’ with insurance pools

earthquake

Government attempts to increase the level of disaster insurance cover and mitigate risk must not distort the commercial insurance market and must allow insurers to price risk appropriately, the Geneva Association is arguing.

State-backed insurance pools potentially interfere with sound risk pricing, driving insurers away from the market and leaving taxpayers to pick up the bill for losses, the industry think-tank says.

Unlike a government-subsidised scheme, private insurers encourage low-risk be

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