The Role of Insurance in Reducing Direct Risk - The Case of Flood Insurance

Surminski, Swenja

doi:10.1561/101.00000062

Cited by 70 publications

(68 citation statements)

References 84 publications

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“…One could argue that risk reduction efforts are essential in maintaining the insurability of these risks, especially in the context of flooding, and that effective adaptation may actually become a condition for granting insurance future cover (Surminski, 2014). An example are household risk reducing measures leading to lower insurance premiums, in turn making insurance more affordable.…”

Section: Resultsmentioning

confidence: 99%

“…Three metrics are commonly used to assess feasibility of new insurance and to evaluate effectiveness of existing insurance schemes: commercial viability for schemes with private sector involvement; financial sustainability; and affordability (Surminski, 2014). Table 1 provides a summary of metrics and definitions commonly applied in the recent literature.…”

Section: Towards a New Insurance Evaluation Methodology: A Review Of mentioning

confidence: 99%

“…The consultation document frames insurance in two ways: the question of availability and affordability of insurance policies, and the potential to use insurance as a lever for prevention and disaster damage reduction. The EC specifically asked how risk transfer can reduce disaster risk today and into the future (EC, 2013;Surminski, 2014)). Although no official EC response has been published since the launch of the consultation there appears to be wide agreement that European harmonization of insurance operations is likely to be ineffective economically and politically (Surminski et al, 2015a).…”

Section: Insurance and Risk Reductionmentioning

confidence: 99%

“…The hazards range from flooding to droughts and wildfires; each case study is located in a different country placing it within a different sociopolitical context; different objectives and concerns for how future risk profiles should evolve. Secondly, the case studies share at least one thing in common: they all embrace the concept of multi-sectoral partnership in order to lower the underlying risks through better collaboration, thus fulfilling one of the key pre-conditions for more effective disaster risk reduction (Surminski 2014). contexts.…”

Section: Findings From the Case Studiesmentioning

confidence: 99%

See 3 more Smart Citations

Investigating the Risk Reduction Potential of Disaster Insurance Across Europe

Surminski

Hudson

2017

Geneva Pap Risk Insur Issues Pract

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Section: Resultsmentioning

confidence: 99%

Section: Towards a New Insurance Evaluation Methodology: A Review Of mentioning

confidence: 99%

Section: Insurance and Risk Reductionmentioning

confidence: 99%

Section: Findings From the Case Studiesmentioning

confidence: 99%

See 2 more Smart Citations

Investigating the Risk Reduction Potential of Disaster Insurance Across Europe

Surminski

Hudson

2017

Geneva Pap Risk Insur Issues Pract

Self Cite

View full text Add to dashboard Cite

“…Similarly will premiums that do not fully reflect the risk, such as subsidized premiums or flat-rate premiums (as well as bundled insurance where the premium reflects several risks), mask the severity of the risk and thus the urgency to adopt prevention measures (Lamond and Penning-Rowsell, 2014). Moral hazard can also occur at the government level,, where high insurance market penetration or 25 the availability of emergency funds (as from the European Solidarity Fund) might lower the urgency for the government to implement prevention measures (Surminski, 2014;.…”

Section: How Does Flood Insurance Work?mentioning

confidence: 99%

When is it beneficial for insurers to engage in climate change adaptation – a cross country comparison

Seifert-Dähnn

2017

Preprint

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Abstract. Natural hazard insurance is suggested an important mechanism to boost climate change adaptation and especially flood risk prevention at individual level and thus decrease losses caused by weather-related disasters. But there is a gap between the theoretical potential described by academic scholars and the actual engagement of insurers. In this paper, this issue is analyzed from the insurers perspective and it is discussed under which conditions it becomes profitable for them to engage in climate change adaptation. It is shown that for many adaptation measures high market penetration over a longer time-period 10 is crucial to make investments profitable. This condition if often only fulfilled in compulsory monopoly insurance systems.Risk-based pricing to incentivize decentralized single-property measures, is seldom done in practice. Bundling of several risks, high market competition and increased transaction costs, but also the required high upfront payment of policy-holders are considered as hinders.

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Charting unknown waters—On the role of surprise in flood risk assessment and management

Merz

Vorogushyn

Lall

et al. 2015

Water Resources Research

115

119

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Unexpected incidents, failures, and disasters are abundant in the history of flooding events. In this paper, we introduce the metaphors of terra incognita and terra maligna to illustrate unknown and wicked flood situations, respectively. We argue that surprise is a neglected element in flood risk assessment and management. Two sources of surprise are identified: (1) the complexity of flood risk systems, represented by nonlinearities, interdependencies, and nonstationarities and (2) cognitive biases in human perception and decision making. Flood risk assessment and management are particularly prone to cognitive biases due to the rarity and uniqueness of extremes, and the nature of human risk perception. We reflect on possible approaches to better understanding and reducing the potential for surprise and its adverse consequences which may be supported by conceptually charting maps that separate terra incognita from terra cognita, and terra maligna from terra benigna. We conclude that flood risk assessment and management should account for the potential for surprise and devastating consequences which will require a shift in thinking.

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The Role of Insurance in Reducing Direct Risk - The Case of Flood Insurance

Cited by 70 publications

References 84 publications

Investigating the Risk Reduction Potential of Disaster Insurance Across Europe

Investigating the Risk Reduction Potential of Disaster Insurance Across Europe

When is it beneficial for insurers to engage in climate change adaptation – a cross country comparison

Charting unknown waters—On the role of surprise in flood risk assessment and management

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