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That is what the reinsurance market is for. Natural disasters are when insurance is most needed, to rebuild a whole community. Disasters are locally correlated, but generally not globally correlated. The global insurance market can handle them just fine, and in fact are a great example of a place where insurance is needed - large, unpredictable, rare, and too expensive to handle by yourself. That is just the same as individual insurance, just at a larger scale.



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