Successes and failures of compulsory risk mitigation: re‐evaluating the Turkish Catastrophe Insurance Pool

Başbuğ-Erkan, B. Burcak; Yılmaz, Özlem

doi:10.1111/disa.12129

Cited by 9 publications

(6 citation statements)

References 18 publications

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“…With reference to available literature, disaster reduction mechanisms contain disaster monitoring and early warning systems, disaster emergency relief, disaster insurance, etc. (Brillinger, 1993;De Hoop and Ruben, 2010;Başbuğ-Erkan and Yilmaz, 2015;Lin, 2018). Besides, some scholars highlight residents' engagement, vulnerability and risk assessment through the lens of community-based disaster reduction (Gaillard and Texier, 2010;Jahangiri et al, 2011;Mallick et al, 2011).…”

Section: Literature Reviewmentioning

confidence: 99%

Minority community willingness to pay for earthquake insurance

Zhang

Qian

2018

DPM

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Purpose The purpose of this paper is to investigate the relationship between potential affecting factors and the local communities’ willingness to pay (WTP) for housing earthquake insurance (HEI) in the context of ethnic minority communities. Design/methodology/approach A literature review was done to identify possible factors affecting WTP for HEI. Fieldwork was conducted in 2017 in Dali Minority Autonomous Prefecture, where the first Chinese HEI was launched in 2015. Interviews were done in two earthquake-prone counties, as the main ethnic minority communities in the area. A total of 536 questionnaires were collected and used as empirical data for testing the impacts mechanism. Findings Respondents’ risk perception, risk exposure, self-prevention behaviors, government aid, insurance experience and sociodemographic characteristics were hypothesized as theoretical indicators correlated to WTP for HEI. Empirical analysis results predict that WTP for HEI is significantly influenced by risk perception, insurance experience, government aid, and age and out-migrating labors. It is evident that higher risk perception and more insurance experience lead to stronger desire for HEI coverage. However, dependency on government aid negatively affects WTP for HEI. Moreover, WTP for HEI is negative in relation to age and out-migrating labors. Surprisingly, ethnic-culture factors were not statistically significant to WTP for HEI. Originality/value This paper is an attempt to identify and verify factors affecting WTP for HEI, bridging the gap of inadequate research on WTP for HEI in ethnic minority communities.

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Section: Literature Reviewmentioning

confidence: 99%

Minority community willingness to pay for earthquake insurance

Zhang

Qian

2018

DPM

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“…For example, in Turkey, propertyowners are required to prove to have valid policy only when they want to buy or sell a house or to obtain a new account for water and electricity services. As argued by Başbug-Erkan and Yilmaz (2015), this sporadic check does not enforce ongoing renewal of the insurance. The Turkish government has therefore activated some initiatives aimed at promoting awareness, many of which have been designed so that the most sensitive citizens involve an increasing number of acquaintances.…”

Section: State-owned Insurancementioning

confidence: 96%

“…Undesired consequences of low insurance penetration are potentially high costs of government's post-disaster assistance (Dixon et al, 2006), and reduced access to the reinsurance market for the insurer (von Lucius, 2004). There are several reasons why the population exhibits careless behavior towards natural disasters' prevention, but state-owned insurances seem particularly affected by charity hazard (Gurenko et al, 2006;Raschky and Weck-Hannemann, 2007;Başbug-Erkan and Yilmaz, 2015;Marshall, 2018). The belief that the government will help irrespective of owning an insurance policy is stronger when governmental relief is more certain (Raschky et al, 2013), and States offering a public-private insurance have usually been very generous to the community when hit by a disaster.…”

Section: State-owned Insurancementioning

confidence: 99%

“…The Turkish government has therefore activated some initiatives aimed at promoting awareness, many of which have been designed so that the most sensitive citizens involve an increasing number of acquaintances. For example, a 20 percent premium discount is offered if eight individual apartment unit owners from the same apartment complex jointly take out a policy, and is supporting the growth of a large volunteer and civil society network (Başbug-Erkan and Yilmaz, 2015;World Bank, 2019). As frequent monitoring mandatory requirement might be expensive, extending the policy validity to multi-years might also help (Michel-Kerjan et al, 2011b;Kleindorfer et al, 2012).…”

Section: State-owned Insurancementioning

confidence: 99%

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Public-Private Partnership in the Management of Natural Disasters: A Review

Perazzini

2020

Preprint

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Natural hazards can considerably impact the overall society of a country. As some degree of public sector involvement is always necessary to deal with the consequences of natural disasters, central governments have increasingly invested in proactive risk management planning. In order to empower and involve the whole society, some countries have established public-private partnerships, mainly with the insurance industry, with satisfactorily outcomes. Although they have proven necessary and most often effective, the public-private initiatives have often incurred high debts or have failed to achieved the desired risk reduction objectives. We review the role of these partnerships in the management of natural risks, with particular attention to the insurance sector. Among other country-specific issues, poor risk knowledge and weak governance have widely challenged the initiatives during the recent years, while the future is threatened by the uncertainty of climate change and unsustainable development. In order to strengthen the country's resilience, a greater involvement of all segments of the community, especially the weakest layers, is needed and the management of natural risks should be included in a sustainable development plan.

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“…The TCIP was initiated as a loss prevention mechanism. It has played an important role in enhancing and monitoring the current National Building Code in Turkey, 189 and has also implemented revisions in land use planning and other mitigation plans. 190 In addition, the TCIP pays much attention to education intended to raise public awareness to catastrophe risk.…”

Section: Regulation By Catastrophe Insurance 229mentioning

confidence: 99%

Regulation by Catastrophe Insurance for Climate Risks: A Comparative Study

Faure

2017

SSRN Journal

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Under the influence of climate-related extremes, the world is exposed to more and more catastrophe risks. Increasingly it is held that the government alone may not be able to adequately prevent disaster risks; a combination of public and private regulation is therefore warranted. Regulation via insurance may help to realize the goal of disaster risk reduction and to mitigate the corresponding losses. In this article we identify five regulatory toolsrisk-based pricing, contract design, loss prevention services, claim management, and refusal to insurethat can be used by catastrophe insurers with the aim of disaster risk reduction. Subsequently, we explore how these tools are used in practice by insurers in five countries: United Kingdom, United States, France, Japan, and Turkey. In doing so, we find that regulation through catastrophe insurance could have a positive effect on disaster risk reduction. However, the possibilities to regulate by insurance are in many countries de facto limited as a result of state intervention. Finally, we discuss the possibility and feasibility of regulation by catastrophe insurance in China, where it is not yet utilized.

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Successes and failures of compulsory risk mitigation: re‐evaluating the Turkish Catastrophe Insurance Pool

Cited by 9 publications

References 18 publications

Minority community willingness to pay for earthquake insurance

Minority community willingness to pay for earthquake insurance

Public-Private Partnership in the Management of Natural Disasters: A Review

Regulation by Catastrophe Insurance for Climate Risks: A Comparative Study

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