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Economies of Integrated Risk Management? An Empirical Analysis of the Swiss Public Insurance Approach to Natural Hazard Prevention

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  • Reimund Schwarze

    (Helmholtz-Centre for Environmental Research – UFZ)

  • Carsten Croonenbroeck

    (University of Rostock)

Abstract

In this paper we discuss the impact of prevention programmes Swiss property insurers undertake to reduce damage claims. While the cantonal public law insurer KGV tends to spend notable amounts of money on prevention programmes to avoid or decrease damage due to natural hazard, the private insurers in the so-called GUSTAVO cantons rather do not. We investigate the interaction of prevention spending, claims and premiums in the KGV system. Furthermore, for the KGV system, we check the causality direction of influence of prevention on the claims and find that increases in damage cause increased prevention. This may seem counterintuitive at first glance, but can be explained by political pressure on public insurers caused by increasing damages of natural hazards.

Suggested Citation

  • Reimund Schwarze & Carsten Croonenbroeck, 2017. "Economies of Integrated Risk Management? An Empirical Analysis of the Swiss Public Insurance Approach to Natural Hazard Prevention," Economics of Disasters and Climate Change, Springer, vol. 1(2), pages 167-178, July.
    • Handle: RePEc:spr:ediscc:v:1:y:2017:i:2:d:10.1007_s41885-017-0014-1
    DOI: 10.1007/s41885-017-0014-1
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    Cited by:

    1. Ilan Noy & Shunsuke Managi & Stephane Hallegatte, 2018. "Economics of Disasters and Climate Change – The Journal’s First Year," Economics of Disasters and Climate Change, Springer, vol. 2(1), pages 1-3, April.
    2. F. Marta L. Di Lascio & Ilan Noy & Selene Perazzini, 2022. "Modelling spatial correlation between earthquake insured losses in New Zealand: a mixed-effects analysis," BEMPS - Bozen Economics & Management Paper Series BEMPS98, Faculty of Economics and Management at the Free University of Bozen.

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