Critics have called it unethical and pointed out that people might start fires to collect on bets. On the other hand, prediction markets can highlight risk and change behaviors in the real world.
The insurance industry used the public database to estimate future costs, while local governments turned to it for lessons on building resilient infrastructure.
Catastrophe bonds play an important role in keeping the insurance market functioning at a time when it’s getting harder for homeowners to get affordable coverage. But what happens catastrophe actually strikes?
