Efficiently reducing natural hazard risks requires a thorough understanding of the costs of natural hazards. Current methods to assess these costs employ a variety of terminologies and approaches for different types of natural hazards and different impacted sectors. This may impede efforts to ascertain comprehensive and comparable cost figures. In order to strengthen the role of cost assessments in the development of integrated natural hazard management, a review of existing cost assessment approaches was undertaken. This review considers droughts, floods, coastal and Alpine hazards, and examines different cost types, namely direct tangible damages, losses due to business interruption, indirect damages, intangible effects, and the costs of risk mitigation. This paper provides an overview of the state-of-the-art cost assessment approaches and discusses key knowledge gaps. It shows that the application of cost assessments in practice is often incomplete and biased, as direct costs receive a relatively large amount of attention, while intangible and indirect effects are rarely considered. Furthermore, all parts of cost assessment entail considerable uncertainties due to insufficient or highly aggregated data sources, along with a lack of knowledge about the processes leading to damage and thus the appropriate models required. Recommendations are provided on how to reduce or handle these uncertainties by improving data sources and cost assessment methods. Further recommendations address how risk dynamics due to climate and socio-economic change can be better considered, how costs are distributed and risks transferred, and in what ways cost assessment can function as part of decision support

[1] This study examines flood risk perceptions of individuals in the Netherlands using a survey of approximately 1000 homeowners. Perceptions of a range of aspects of flood risk are elicited. Various statistical models are used to estimate the influence of socioeconomic and geographical characteristics, personal experience with flooding, knowledge of flood threats, and individual risk attitudes on shaping risk belief. The study shows that in general, perceptions of flood risk are low. An analysis of the factors determining risk perceptions provides four main insights relevant for policy makers and insurers. First, differences in expected risk are consistently related to actual risk levels, since individuals in the vicinity of a main river and low-lying areas generally have elevated risk perceptions. Second, individuals in areas unprotected by dikes tend to underestimate their risk of flooding. Third, individuals with little knowledge of the causes of flood events have lower perceptions of flood risk. Fourth, there is some evidence that older and more highly educated individuals have a lower flood risk perception. The findings indicate that increasing knowledge of citizens about the causes of flooding may increase flood risk awareness. It is especially important to target individuals who live in areas unprotected by dike infrastructure, since they tend to be unaware of or ignore the high risk exposure faced.

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Climate change is projected to cause severe economic losses, which has the potential to affect the insurance sector and public compensation schemes considerably. This article discusses the role insurance can play in adapting to climate change impacts. The particular focus is on the Dutch insurance sector, in view of the Netherlands being extremely vulnerable to climate change impacts. The usefulness of private insurance as an adaptation instrument to increased flood risks is examined, which is currently unavailable in the Netherlands. It is questioned whether the currently dominant role of the Dutch government in providing damage relief is justified from an economic efficiency perspective. Characteristics of flood insurance arrangements in the Netherlands, the United Kingdom, Germany, and France are compared in order to identify possible future directions for arrangements in the Netherlands. It is argued that social welfare improves when insurance companies take responsibility for part of the risks associated with climate change.