India’s Ministry of Finance is pushing the government to explore the use of catastrophe bonds as a way to hedge against the country’s exposure to natural catastrophes in a report issued yesterday.
The annual Economic Survey published by the ministry argues that “capital market solutions for catastrophe risk insurance” requires focus from the government and legislature.
“The instrument is widely used in advanced countries and there is scope for introducing it in countries like India to provide insurance against contingencies,” the report said.
The report did not provide details on how catastrophe bonds could be expanded in the country or what next steps were needed to encourage use of insurance linked securities.
The Economic Survey is an annual report published by the Ministry of Finance that provides an assessment of India’s performance against other global economies.
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