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

Article


Lamond, J. and Penning-Rowsell, E. 2014. The robustness of flood insurance regimes given changing risk resulting from climate change. Climate Risk Management. 2, pp. 1-10. https://doi.org/10.1016/j.crm.2014.03.001
TypeArticle
TitleThe robustness of flood insurance regimes given changing risk resulting from climate change
AuthorsLamond, J. and Penning-Rowsell, E.
Abstract

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.

Research GroupFlood Hazard Research Centre
PublisherElsevier
JournalClimate Risk Management
ISSN2212-0963
Publication dates
Online29 Mar 2014
Print14 Mar 2014
Publication process dates
Deposited27 May 2015
Output statusPublished
Publisher's version
Copyright Statement

© 2014 Published by Elsevier B.V. This is an open access article under the CC BY-NC-ND license (http://creativecommons.org/licenses/by-nc-nd/3.0/)

Additional information

Available online 29 March 2014

Digital Object Identifier (DOI)https://doi.org/10.1016/j.crm.2014.03.001
LanguageEnglish
Permalink -

https://repository.mdx.ac.uk/item/85609

Download files

  • 13
    total views
  • 1
    total downloads
  • 0
    views this month
  • 1
    downloads this month

Export as