Global risk sharing Fourth, it is important to make efforts to share risk, especially on a global scale. We are not able to avoid the materialization of the risk of natural disasters. However, it is possible to mitigate casualties and losses to some extent by signing in advance a contingent losssharing contract between insurance companies and investors.
In the case of the Great East Japan Earthquake, physical and human losses were covered not only by Japanese insurance companies but also reinsurance companies abroad. Moreover, as significant natural disasters occurred one after another recently, we have seen an increase in the issuance of catastrophe bonds as a means of diversifying the risks.