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Insuring Climate Change: New Risks and the Financialization of Nature

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  • Razmig Keucheyan

Abstract

Insurance is a central institution in modern societies. Economic and technological developments generate ‘new risks’, which are often covered by new forms of insurance. Because of its underlying uncertainty — the difficulty both of predicting its effects and evaluating its costs — climate change represents a major challenge for the insurance industry. It also represents a challenge for states, who have historically played the role of insurers ‘of last resort’ in the event of catastrophes. This article examines the ongoing financialization of climate risk insurance, which is part of a larger trend of financialization of nature. Financialization, through measures such as ‘catastrophe bonds’, is the neoliberal solution to the rising costs of natural disasters which the insurance industry has experienced since the 1990s. The article analyses the effects of financialization on the insurance industry, on the state's role as insurer ‘of last resort’, and on associated forms of knowledge production (big data), critiquing the process of financialization on both economic and political grounds.

Suggested Citation

  • Razmig Keucheyan, 2018. "Insuring Climate Change: New Risks and the Financialization of Nature," Development and Change, International Institute of Social Studies, vol. 49(2), pages 484-501, March.
    • Handle: RePEc:bla:devchg:v:49:y:2018:i:2:p:484-501
    DOI: 10.1111/dech.12367
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    References listed on IDEAS

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    Cited by:

    1. Leigh Johnson & Tahira Shariff Mohamed & Ian Scoones & Masresha Taye, 2023. "Uncertainty in the drylands: Rethinking in/formal insurance from pastoral East Africa," Environment and Planning A, , vol. 55(8), pages 1928-1950, November.
    2. Daniela Gabor, 2021. "The Wall Street Consensus," Development and Change, International Institute of Social Studies, vol. 52(3), pages 429-459, May.
    3. Jorge Garcia-Arias & Alan Cibils & Agostina Costantino & Vitor B. Fernandes & Eduardo Fernández-Huerga, 2021. "When Land Meets Finance in Latin America: Some Intersections between Financialization and Land Grabbing in Argentina and Brazil," Sustainability, MDPI, vol. 13(14), pages 1-37, July.
    4. Sovacool, Benjamin K. & Turnheim, Bruno & Hook, Andrew & Brock, Andrea & Martiskainen, Mari, 2021. "Dispossessed by decarbonisation: Reducing vulnerability, injustice, and inequality in the lived experience of low-carbon pathways," World Development, Elsevier, vol. 137(C).
    5. Stéphanie Barral, 2023. "Risk management in the Common Agricultural Policy: the promises of data and finance in the face of increasing hazards," Review of Agricultural, Food and Environmental Studies, Springer, vol. 104(1), pages 67-76, March.
    6. Justyna Agnieszka Franc-Dabrowskaa, 2019. "Crawling financialization in Central and Eastern Europe using the example of Agriculture," Economia agro-alimentare, FrancoAngeli Editore, vol. 21(3), pages 677-696.
    7. Sam Ashman & Ben Fine & Ewa Karwowski, 2021. "The Relevance of Financialization for African Economies: Lessons from South Africa," Working Papers 245, Department of Economics, SOAS University of London, UK.
    8. Gabor, Daniela, 2020. "The Wall Street Consensus," SocArXiv wab8m, Center for Open Science.

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