DOI: 10.3390/atmos11020146
论文题名: Impacts of climate change and remote natural catastrophes on EU flood insurance markets: An analysis of soft and hard reinsurance markets for flood coverage
作者: Tesselaar M. ; Botzen W.J.W. ; Aerts J.C.J.H.
刊名: Atmosphere
ISSN: 20734433
出版年: 2020
卷: 11, 期: 2 语种: 英语
英文关键词: Capital markets
; Climate change
; Flood (re)insurance
; Market penetration
; Remote impacts
; Unaffordability
; Vulnerability
Scopus关键词: Climate models
; Commerce
; Disasters
; Financial markets
; Flood insurance
; Floods
; Investments
; Climate change scenarios
; Insurance markets
; Insurance premiums
; Market penetration
; Natural disasters
; Remote impacts
; Unaffordability
; Vulnerability
; Climate change
英文摘要: The increasing frequency and severity of natural catastrophes due to climate change is expected to cause higher natural disaster losses in the future. Reinsurance companies bear a large share of this risk in the form of excess-of-loss coverage, where they underwrite the most extreme portion of insurers' risk portfolios. Past experience has shown that after a very large natural disaster, or multiple disasters in close succession, the recapitalization need of reinsurers could trigger a "hard" reinsurance capital market, where a high demand for capital increases the price charged by investors, which is opposed to a "soft" market, where there is a high availability of capital for reinsurers. Consequently, the rising costs of underwriting are transferred to insurers, which ultimately could trigger higher premiums for natural catastrophe (NatCat) insurance worldwide. Here, we study the vulnerability of riverine flood insurance systems in the EU to global reinsurance market conditions and climate change. To do so, we apply the "Dynamic Integrated Flood Insurance" (DIFI) model, and compare insurance premiums, unaffordability, and the uptake for soft and hard reinsurance market conditions under an average and extreme scenario of climate change. We find that a rising average and higher variance of flood risk towards the end of the century can increase flood insurance premiums and cause higher premium volatility resulting from global reinsurance market conditions. Under a "mild" scenario of climate change, the projected yearly premiums for EU countries, combined, are ¿1380 higher under a hard compared to a soft reinsurance capital market in 2080. For a high-end climate change scenario, this difference becomes ¿3220. The rise in premiums causes problems with the unaffordability of flood coverage and results in a declining demand for flood insurance, which increases the financial vulnerability of households to flooding. A proposed solution is to introduce government reinsurance for flood risk, as governments can often provide cheaper reinsurance coverage and are less subject to the volatility of the capital markets. © 2020 by the author. Licensee MDPI, Basel, Switzerland. Citation statistics:
资源类型: 期刊论文
标识符: http://119.78.100.158/handle/2HF3EXSE/159488
Appears in Collections: 气候变化与战略
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作者单位: Institute for Environmental Studies, VU University Amsterdam, De Boelelaan 1087, HV Amsterdam, 1081, Netherlands; Utrecht University School of Economics, Utrecht University, Kriekenpitplein 21-22, EC Utrecht, 3584, Netherlands; Risk Management and Decision Processes Center, The Wharton School, University of Pennsylvania, 3819 Chestnut Street, Philadelphia, PA 19104-5340, United States; Deltares, Boussinesqweg 1, HV Delft, 2629, Netherlands
Recommended Citation:
Tesselaar M.,Botzen W.J.W.,Aerts J.C.J.H.. Impacts of climate change and remote natural catastrophes on EU flood insurance markets: An analysis of soft and hard reinsurance markets for flood coverage[J]. Atmosphere,2020-01-01,11(2)