The Catastrophic Disaster and diversification of the risk - CAT Bond and Micro-insurance -

Increased frequency and intensity of natural disasters around the world and enormous damage, and can not usually afford to be called catastrophic disaster. Recently, the global scale of the damage caused catastrophic disasters in 60 years and the trend has continued to increase. Natural disaster means legally under the Article 2 of the Countermeasures Against Natural Disasters Act says “the disaster caused by typhoon, flood, heavy rain, strong wind, wind wave, sea wave, tidal water, heavy snowfall, drought, earthquake (including any earthquake-caused tsunami) and yellow dust and any other disaster caused by natural phenomenons”. Essentially natural disasters have artificially difficult to completely eliminate or avoid them irresistible factors. Ultimately, disaster refers to any type of damage caused by storms, earthquakes, disasters caused by flooding to mankind. Recent disasters due to climate change, this was extremely difficult adaptation increases the risk, which has been recognized as catastrophic disasters mentioned above. For this reason, a variety of systems to adapt to catastrophic disasters around the world and try and research. In particular, a range of research and development have been made on the institutional side. Among the institutional insurance products and mutual-aid is the most representative example for the catastrophic disaster. In addition to the bonds have been developed for natural disasters backed by insurance, also known as CAT Bond, have been the subject of the current transaction. This paper focuses on understanding the reality of catastrophe bonds for risk management as the product distributed in conjunction with the insurance from a macro point of view and introduce an overview of the information on micro insurance as a product for further diversification of the risk.