Feasibility Study of Cat Bond and Sidecar for Emerging Markets Management Case Study: Iranian Economy

Nouri, Masoumeh; Chirani, Ebrahim; Mirbargkar, Seyyed Mozafar

doi:10.22034/efp.2026.2085114.1028

Feasibility Study of Cat Bond and Sidecar for Emerging Markets Management Case Study: Iranian Economy

نوع مقاله : مقاله پژوهشی

نویسندگان

Masoumeh Nouri ¹

Ebrahim Chirani ¹

Seyyed Mozafar Mirbargkar ²

¹ Department of Financial Management, Ra.C., Islamic Azad University, Rasht, Iran

² Department of Financial Management, Ra.C., Islamic Azad University, Rasht, Iran.

10.22034/efp.2026.2085114.1028

چکیده

Abstract the spread of catastrophic events and the increase in systematic risks have doubled the need for new risk management tools, especially in emerging markets where resilience to such shocks is of vital importance. In the meantime, Cat Bond and Sidecar have been invented as risk management tools. The present article aims to assess the feasibility of these two in Iran, using a mixed approach (meta synthesis in the qualitative part and the structural transactions approach (PLS-SEM) along with t-test in SPSS software in the quantitative part). Meta synthesis was carried out with a systematic synthesis of related studies in a specific time period (domestic sources 1380-1403 and foreign sources 2000-2025) using the seven-stage model of San delowski and Baroso. The search strategy was carried out with specific criteria such as title, abstract and content, design, and sources that were not proportional to the research question and purpose were excluded from the study. From the initial 134 studies, 56 were selected as eligible for the final analysis and by identifying 77 concepts, 27 factors affecting the performance and design of this tool were jointly selected and compared in the form of 5 major categories. The interpretations indicate differences between the two tools for implementation and dissemination in Iran. The results also show that the implementation and development of this tool in emerging markets such as Iran requires management and simultaneous attention to several intervening dimensions to provide a practical guide for financial policymakers in selecting the appropriate risk transfer tool.

چکیده تصویری

کلیدواژه‌ها

Iranian Economy

Emerging Markets

Risk Management

Cat Bond

Sidecar

A.M. Best Company. (2006). Annual Global Reinsurance Report: Reinsurers Humbled, But Most Not Broken, by Hurricane Losses. Oldwick, NJ: A.M. Best Company.

Chang, C. C., Wang, Y. J., & Yu, M. T. (2019). Catastrophe bond spread and hurricane arrival frequency. North American Journal of Economics and Finance, 54, 100906.

Cox, S. H., & Pedersen, H. W. (2000). Catastrophe risk bonds. North American Actuarial Journal, 4(4), 56–82.

Cummins, J. D. (2007). Reinsurance for natural and man-made catastrophes in the United States: Current state of the market and regulatory reforms. Risk Management and Insurance Review, 10(2), 179–220.

Goda, K. (2015). Seismic risk management of insurance portfolio using catastrophe bonds. Computer-Aided Civil and Infrastructure Engineering, 30(8), 570–582.

Hassangholipour Yasuri, T., Chirani, E., Mirbargkar, S. M., & Kheradyar, S. (2022). Providing a framework for catastrophic risk management with the help of secondary risk transfer financial instruments. Financial Research Journal, 24(2), 1–26.

Jafari, D. (2024). Credit insurance securitization, as a method for risk management of insurance companies and facilitating the supply of this insurance in Iran. International Business Management, 7(1), 131–146.

Liu, H., Tang, Q., & Yuan, Z. (2020). Indifference pricing of insurance-linked securities in a multi-period model. European Journal of Operational Research, 289(2), 793–805.

Mazloumi, N. (2011). Insurance bonds (a new opportunity for insurers and investors) (Case Report No. 3). Insurance Research Institute.

McBride, G., & Lestourgeon, P. (2008). All-weather insurance securitization. Emphasis, 3, 14–19.

Mir Motahari, S. A. (2006). The role of insurance institutions in the capital market. Insurance Industry Quarterly, 21(4), 1–11.

Moussavian, S. A., Mahdavi, G., & Mirtaher, M. (2015). Reinsurance bonds for risk transfer in the oil industry. Islamic Financial Research, 4(2), 1–38.

Peikarjo, K., & Davoodi Rostami, H. (2009). Study of the possibility of substituting catastrophic risk securities with common reinsurance in the country’s insurance industry. Financial Science of Securities Analysis, 2(3), 1–25.

Rode, D., Fischhoff, B., & Fischbeck, P. (2000). Catastrophic risk and securities design (Working Paper). Carnegie Mellon University, Department of Social and Decision Sciences & Department of Engineering and Public Policy, Pittsburgh, PA.

Sandelowski, M., & Barroso, J. (2007). Using qualitative metasummary to synthesize qualitative and quantitative descriptive findings. Research in Nursing & Health, 30(1), 99–111.

Shao, J., Papaioannou, A. D., & Pantelous, A. A. (2017). Pricing and simulating catastrophe risk bonds in a Markov-dependent environment. Applied Mathematics and Computation, 309, 68–84.

Swiss Re. (2007). Natural catastrophes and man-made disasters in 2006: Low insured losses (sigma No. 2/2007). Zurich, Switzerland. http://www.swissre.com/resources/ce8f6a80455c6b9f8b2bbb80a45d76a0-sigma2_2007_e.pdf

Swiss Re. (2024). sigma preliminary estimates of catastrophe losses: The financial management of catastrophic flood risks in emerging‐economy countries. Zurich: Swiss Re.

Wattman, M. P., & Jones, K. (2007). Insurance risk securitization. The Journal of Structured Finance, 13(4), 48–56.