Integration of Risk and Resilience into Policy

Nyer, Raymond; Baubion, Charles; Basin, Bérangère; Damicis, Adeline; Maraisse, Sonia; Morel, Mathieu; Vullierme, Emmanuel

doi:10.1007/978-94-024-1123-2_12

Cited by 1 publication

(1 citation statement)

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“…The Organization for Economic Cooperation and Development (OECD) estimated in 2014 that a flood comparable to the historic flood of 1910 could affect up to five million citizens and cause damage costing up to €30 billion (Baubion, 2015). This scenario was the basis of the EU‐funded Sequana flood simulation in March 2016, a large‐scale flood crisis management exercise with civil protection from over 25 countries and the local population over the course of 2 weeks (Nyer et al., 2017). Since then, the Paris metropolitan region has faced major flooding twice.…”

Section: Introductionmentioning

confidence: 99%

Insights into the complementarity of natural disaster insurance purchases and risk reduction behavior

2023

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While flooding is the costliest natural disaster risk, public‐sector investments provide incomplete protection. Moreover, individuals are in general reluctant to voluntarily invest in measures which limit damage costs from natural disasters. The moral hazard hypothesis argues that insured individuals take fewer other preparedness measures based on their assumption that their losses will be covered anyway. Conversely, the advantageous selection hypothesis argues that individuals view insurance and other risk reduction measures as complements. This study offers a comprehensive assessment of factors related to the separate uptake of natural disaster insurance and the flood‐proofing of homes as well as why people may take both of these measures together. We use data from a survey conducted in Paris, France, in 2018, after several flood events, for a representative sample of 2976 residents facing different levels of flood risk. We perform both main effects regressions and interaction analyses to reveal that home adaptation to flooding is positively associated with comprehensive insurance coverage, which includes financial protection against natural disasters. Furthermore, actual and perceived risks, as well as awareness of official information on flood risk, are found to explain some of the relationship between home adaptation and comprehensive insurance purchase. We suggest several recommendations to policymakers based on these insights which aim to address insurance coverage gaps and the failure to take disaster risk reduction measures. In particular, groups in socially vulnerable situations may benefit from subsidized insurance, low interest loans, and decision aids to implement costly adaptation measures.

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Section: Introductionmentioning

confidence: 99%