Insurance against Losses from Natural Disasters. Empirical Evidence from Natural Disasters in the History of Iran

Natural disasters cause significant financial pressures, with pecuniary short-term impacts and long-term development implications. Reallocation is essentially fiscal response to disaster. Panel data is essentially cross-sectional data that is pooled together for a certain period of time with equal intervals. Panel data analysis is applied to series of data collected from the years 2000 to 2011 for 8 different natural disasters in Iran which are collected from different sources. The aim of this paper is to examine the relationship between the economic growth and natural disasters and to explain the pricing the net premium and offering applicable plan for insurance policies in different fields like fire insurance and life insurance to recover the losses. Each natural disaster has its impact on economic growth based on its severity. It is concluded that the impact of disasters could be covered by the insurance industry and government budget. The government must provide budget prospects for future natural disasters to afford the losses.