Insurers may get to float CAT bonds

The Economic Survey 2009-10 has pitched for introducing catastrophe risk insurance in capital market and also pointed out the need for greater investor awareness and a more developed pension sector in the country.

In the backdrop of the latest natural calamities that have hit countries globally,the survey has suggested that there is a scope of introducing catastrophe bonds in the country. Capital market solutions for catastrophe risk insurance are another area that needs focus… The instrument is widely used in advanced countries and there is scope for introducing it in countries like Indian to provide insurance against contingencies, states the survey.

The survey has also pointed at the limited participation of retail investors in the capital markets and also the interdependence between corporates and the mutual funds. It suggests that the stakeholders concerned should lay more emphasis on investor awareness.

Moreover,the survey has emphasised on the need to give statutory status to the pension watchdog,PFRDA.