Universitas Padjadjaran Researcher Focuses on Sustainability Research (How to Price Catastrophe Bonds for Sustainable Earthquake Funding? A Systematic Review of the Pricing Framework): Sustainability Research

Economics Daily Report

2023 MAY 26 (NewsRx) -- By a News Reporter-Staff News Editor at Economics Daily Report -- Investigators discuss new findings in sustainability research. According to news originating from Sumedang, Indonesia, by NewsRx correspondents, research stated, “Earthquake contingency costs in traditional insurance cannot provide sufficient earthquake funding for a country because they often differ significantly from actual losses. Over the last three decades, this approach has been replaced by linking earthquake insurance to bonds in the capital market; this is now known as the earthquake catastrophe bond (ECB).”

Financial supporters for this research include Padjadjaran Doctoral Program Scholarship At Universitas Padjadjaran.

Our news journalists obtained a quote from the research from Universitas Padjadjaran: “Through the ECB, contingency costs become larger and more sustainable earthquake funds. Unfortunately, there are challenges in ECB issuance, as the pricing framework does not yet have standard rules and still needs to be studied. Therefore, the objective of this study is to systematically review how the ECB pricing framework is designed. The method used in this review is PRISMA. First, articles aiming to design an ECB pricing framework were collected from the Scopus, Science Direct, and Dimensions databases on 22 March 2023. Then, the results were selected, resulting in eleven relevant articles.”

According to the news reporters, the research concluded: “Then, the articles’ pricing frameworks were reviewed based on variables, methods, trigger events, coupon and redemption value payment schemes, and the model solution forms. Finally, several research opportunities for academics are also outlined. This research constitutes a reference for ECB issuers during the pricing process and can motivate academics to design more useful ECB pricing models.”

For more information on this research see: How to Price Catastrophe Bonds for Sustainable Earthquake Funding? A Systematic Review of the Pricing Framework. Sustainability, 2023,15(9). (Sustainability - http://www.mdpi.com/journal/sustainability). The publisher for Sustainability is MDPI AG.

A free version of this journal article is available at https://doi.org/10.3390/su15097705.

Our news editors report that additional information may be obtained by contacting Riza Andrian Ibrahim, Doctoral Program of Mathematics, Faculty of Mathematics and Natural Sciences, Universitas Padjadjaran, Sumedang 45363, Indonesia. Additional authors for this research include Sukono, Herlina Napitupulu, Rose Irnawaty Ibrahim.

ORCID is an identifier for authors and includes bibliographic information. The following is ORCID information for the authors of this research: Riza Andrian Ibrahim (http://orcid.org/0000-0002-2686-1752), Sukono (http://orcid.org/0000-0003-2608-9712), Herlina Napitupulu (http://orcid.org/0000-0002-1638-282X), Rose Irnawaty Ibrahim (http://orcid.org/0000-0002-8393-5455).

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