The possibilities of applying ART products to natural disasters in the Czech Republic

The diploma thesis deals with the possibilities of applying weather derivatives and catastrophe bonds as alternative risk transfer products, which enable to cope with natural disaster risk in the Czech Republic. The author highlights an obvious increase in occurrence and intensity of extreme climate events resulting into devastating floods. Total costs caused by floods in August 2002, which hadn't been known so far, had important impact on the Czech insurance market. The situation is in many aspects similar to circumstances, which led to the birth of ART products abroad. If the recent tendencies continue, Czech insurers will have to find new ways of dealing with these risks beside the traditional commercial insurance. In accordance with conclusions of this thesis, applying of catastrophe bonds isn't supposed in the future. However, the weather derivatives seem to be an alternative with great potential