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Index Geophysics

The robustness of flood insurance regimes given changing risk resulting from climate change

Item

Title (Dublin Core)

The robustness of flood insurance regimes given changing risk resulting from climate change

Description (Dublin Core)

The changing risk of flooding associated with climate change presents different challenges for the different flood insurance market models in use around the world, which vary in respect of consumer structure and their risk transfer mechanism. A review of international models has been undertaken against three broad criteria for the functioning and sustainability of a flood insurance scheme: knowing the nature of the insurable risk; the availability of an insurable population; and the presence of a solvent insurer. The solvency of insurance markets appears strong, partly because insurers and reinsurers can choose to exclude markets which would give rise to insolvency or can diversify their portfolios to include offsetting perils. Changing risk may threaten solvency if increasing risk is not recognised and adjusted for but insurability of flood risk may be facilitated by the use of market based and hybrid schemes offering greater diversification and more flexibility. While encouragement of mitigation is in theory boosted by risk based pricing, availability and affordability of insurance may be negatively impacted. This threatens the sustainability of an insurable population, therefore the inclusion of the state in partnership is beneficial in ensuring continuity of cover, addressing equity issues and incentivising mitigation.

Creator (Dublin Core)

Jessica Lamond
Edmund Penning-Rowsell

Subject (Dublin Core)

Insurance and risk
Floods/prediction planning
Adaptation
Climate change
Disaster risk reduction
Meteorology. Climatology
QC851-999

Publisher (Dublin Core)

Elsevier

Date (Dublin Core)

2014-01-01T00:00:00Z

Type (Dublin Core)

article

Identifier (Dublin Core)

2212-0963
10.1016/j.crm.2014.03.001
https://doaj.org/article/c3bfbf456d1c45379c51b17a0ac8bcf7

Source (Dublin Core)

Climate Risk Management, Vol 2, Iss C, Pp 1-10 (2014)

Language (Dublin Core)

EN

Relation (Dublin Core)

http://www.sciencedirect.com/science/article/pii/S2212096314000072
https://doaj.org/toc/2212-0963

Provenance (Dublin Core)

Journal Licence: CC BY-NC-ND