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Novel and improved insurance instruments for risk reduction

Author

Listed:
  • Swenja Surminski
  • Paul Hudson
  • Jeroen Aerts
  • Wouter Botzen
  • M.Conceição Colaço
  • Florence Crick
  • Jill Eldridge
  • Anna Lorant
  • António Macedo
  • Reinhard Mechler
  • Carlos Neto
  • Robin Nicolai
  • Dionisio Pérez-Blanco
  • Francisco Rego

Abstract

Managing risk and adapting to climate change is essential to minimise the losses and damages during and after disasters and extreme weather events. Several risk management approaches exist, one of which is the use of economic instruments (EI). Examples of EIs include taxes, subsidies and insurance to deliver financial protection in the event of a disaster, yet their design and the way in which they operate is essential to their success in mitigating and minimising hazard loss. Insurance is one example of an EI and functions as a tool to share and transfer risks and losses and is useful in aiding adaptation to climate change. Within this context insurance may be delivered using a range of approaches, which together contribute to its feasibility for delivery and operation as well as the potential for incentivising behavioural change. Yet undesirable aspects also exist and can include a lack of comprehensive information and cognitive biases, as well as financial constraints and moral hazard.

Suggested Citation

  • Swenja Surminski & Paul Hudson & Jeroen Aerts & Wouter Botzen & M.Conceição Colaço & Florence Crick & Jill Eldridge & Anna Lorant & António Macedo & Reinhard Mechler & Carlos Neto & Robin Nicolai & Di, 2015. "Novel and improved insurance instruments for risk reduction," GRI Working Papers 188, Grantham Research Institute on Climate Change and the Environment.
    • Handle: RePEc:lsg:lsgwps:wp188
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    References listed on IDEAS

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    2. Swenja Surminski & Paul Hudson, 2017. "Investigating the Risk Reduction Potential of Disaster Insurance Across Europe," The Geneva Papers on Risk and Insurance - Issues and Practice, Palgrave Macmillan;The Geneva Association, vol. 42(2), pages 247-274, April.
    3. Unterberger, Christian & Hudson, Paul & Botzen, W.J. Wouter & Schroeer, Katharina & Steininger, Karl W., 2019. "Future Public Sector Flood Risk and Risk Sharing Arrangements: An Assessment for Austria," Ecological Economics, Elsevier, vol. 156(C), pages 153-163.

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