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Climate Risk Management and Institutional Learning

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  • Dowlatabadi, Hadi
  • Cook, Christina

Abstract

Insurance companies are a prominent mechanism for risk transfers. Many initiatives are looking toward private–public partnerships and new risk-management instruments to provide a cushion for climate change-related effects. For this aspiration to be fulfilled, insurers and institutions within which they operate need to learn about emergent risks and develop workable strategies. We explore three factors shaping the evolution of insurance practices - quantitative models of catastrophic loss, experience of catastrophic loss, and outcomes of litigated cases. We use the available evidence to assess the importance of each of these factors in how the industry is evolving and, hence, what actual risk reductions and transfers are more likely in the future.

Suggested Citation

  • Dowlatabadi, Hadi & Cook, Christina, 2007. "Climate Risk Management and Institutional Learning," RFF Working Paper Series dp-07-19, Resources for the Future.
    • Handle: RePEc:rff:dpaper:dp-07-19
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    File URL: http://www.rff.org/RFF/documents/RFF-DP-07-19-REV.pdf
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    References listed on IDEAS

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    More about this item

    Keywords

    climate change; insurance; risk management; climate change litigation; insurance modeling and learning;
    All these keywords.

    JEL classification:

    • Q54 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Climate; Natural Disasters and their Management; Global Warming
    • K23 - Law and Economics - - Regulation and Business Law - - - Regulated Industries and Administrative Law
    • G22 - Financial Economics - - Financial Institutions and Services - - - Insurance; Insurance Companies; Actuarial Studies

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