A case for risk management in the Swedish housing market Studying the demand for market value insurance products in the Swedish metropolitan residential real estate market

Abstract

Abstract This thesis builds on the discussions by Robert Shiller and Peter Englund, among others, proposing outlines for an insurance policy on the market value of homes. The aim of the thesis is to examine if risk is perceived in the current housing market, if there is a demand for managing part of this risk, and how one could go about when constructing a market value insurance policy. A securitization of the insurance policies into a Market Insurance Backed Security (MIBS) is further proposed, which facilitates risk transfer to investors. 70% of our sample find there to be at least some risk in the housing market and the interest for the insurance is found to be significantly different from zero. The securitization method could set further research on a new path, ultimately enabling households to manage risk in an insurance scheme and through investments in MIBS. JEL Classification: R39, G41, G22, G11