ABSTRACT
The main criticism concerns ex post compensation that is paid by the government on an ad hoc basis but also the facilitation of insurance markets or the role of the government as reinsurer of last resort has been attacked. This chapter assesses whether the criticism against a role is justified, especially in comparison to the alternative of providing direct ex post compensation to victims that is paid by the state on an ad hoc basis. Government relief in the form of a lump sum payment has a negative effect on taking preventive measures by the victim and therefore would not adopt a resilient behaviour against disasters. The chapter focuses on the types of government intervention trying to stimulate the insurability of catastrophic risks. In many countries there are reforms and discussions about schemes for the compensation of victims of catastrophes.
