Disaster risk reduction and international catastrophe risk insurance facility

Thirawat, Nipawan; Udompol, Sirikamon; Ponjan, Pathomdanai

doi:10.1007/s11027-016-9711-2

Cited by 18 publications

(11 citation statements)

References 10 publications

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“…By developing and providing knowledge to mitigate losses through risk engineering and insuring sustainable technologies, the sector can play an important role [ 79 ]. In addition, especially in the case of climate change, the use of specific financial instruments such as cat bonds and catastrophe risk swaps are important tools for disaster risk management [ 85 ].…”

Section: Resultsmentioning

confidence: 99%

“…In Europe, however, only a quarter of climate-related and extreme event losses have been insured over the past 40 years, revealing a climate protection gap [ 26 ]. Other factors in which governments can be involved include providing a water management solution and establishing monitoring systems for extreme natural events [ 85 ]. Another example of government involvement can be found in the United Kingdom, where the government works with private insurers to provide flood insurance [ 95 ].…”

Section: Resultsmentioning

confidence: 99%

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A systematic literature review on sustainability issues along the value chain in insurance companies and pension funds

Aburto Barrera,

Wagner

2023

Eur. Actuar. J.

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Sustainability is now a priority issue that governments, businesses and society in general must address in the short term. In their role as major global institutional investors and risk managers, insurance companies and pension funds are strategic players in building socio-economic and sustainable development. To gain a comprehensive understanding of the current state of action and research on environmental, social and governance (ESG) factors in the insurance and pension sectors, we conduct a systematic literature review. We rely on the PRISMA protocol and analyze 1 731 academic publications available in the Web of Science database up to the year 2022 and refer to 23 studies outside of scientific research retrieved from the websites of key international and European organizations. To study the corpus of literature, we introduce a classification framework along the insurance value chain including external stakeholders. The main findings reveal that risk, underwriting and investment management are the most researched areas among the nine categories considered in our framework, while claims management and sales tend to be neglected. Regarding ESG factors, climate change, as part of the environmental factor, has received the most attention in the literature. After reviewing the literature, we summarize the main sustainability issues and potential related actions. Given the current nature of the sustainability challenges for the insurance sector, this literature review is relevant to academics and practitioners alike.

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Section: Resultsmentioning

confidence: 99%

Section: Resultsmentioning

confidence: 99%

A systematic literature review on sustainability issues along the value chain in insurance companies and pension funds

Aburto Barrera,

Wagner

2023

Eur. Actuar. J.

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“…The strategy must focus on how to work together with governments to determine which DRF instruments, such as insurance, funds, risk pools, CAT bonds (Catastrophe bonds), and capital markets, can best be used by particular countries. Given the increasing frequency of climate catastrophes due to climate change in the Pacific, there is a growing necessity for innovative DRF instruments to be embedded in each country's disaster risk management strategy (Thirawat et al 2016).…”

Section: Drf Strategy As An Alternative To Climate Risk Insurance In ...mentioning

confidence: 99%

Climate risk insurance in Pacific Small Island Developing States: possibilities, challenges and vulnerabilities—a comprehensive review

Jain

Chida²,

Pathak

et al. 2022

Mitig Adapt Strateg Glob Change

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For the Pacific Small Island Developing States (PSIDS), climate change will greatly exacerbate their vulnerability. The PSIDS have a high ranking in the Climate Risk Index and the World Risk Index. Financial losses due to climate-induced disasters, in terms of gross domestic product (GDP), are also high in the Pacific region. While climate risk insurance solutions could play a key role in the efficient distribution of recovery resources, there are many challenges to their successful implementation. Effective climate risk insurance products for the vulnerable sections of these societies are almost non-existent in this part of the world. Among the worst climate-induced disasters to affect the PSIDS are those related to cyclones and floods. These not only adversely impact the welfare of the households affected by these disasters, but they lower the long-term development potential of the countries involved. There is also evidence to suggest that climate-induced disasters are increasing in frequency and intensity over time due to climate change. It is against this background that an inquiry into the necessity for climate risk insurance products in the context of PSIDS should take place. This paper gives a comprehensive review of the literature addressing climate risk insurance as a risk mitigation or climate adaptation tool for managing the climate-induced financial vulnerabilities in the PSIDS. The paper explores the affordability of climate risk insurance, particularly among the vulnerable sections of society, and discusses the challenges of implementing an appropriate climate risk insurance model in the region. Finally, it examines recent climate risk insurance initiatives that have been attempted by multilateral agencies, such as the United Nations Development Programme (UNDP), the United Nations' Pacific Financial Inclusion Practice (UNCDF), Pacific Insurance and Climate Adaptation Programme (PICAP), and respective local governments.

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“…(Kunreuther & Lyster, 2016). Fiscal liabilities could simultaneously be reduced if such risk transfers mechanisms would be established in an international pooled catastrophe fund instead of a national disaster risk insurance (Thirawat et al, 2017). Overall, future research should focus on the pre-and post-disaster risk transfer mechanisms to build socioeconomic resilience in the face of natural disasters.…”

Section: Risk Transfer Mechanismsmentioning

confidence: 99%

Shifting from asset damage to well-being loss within flood risk management

Hattum¹,

Ruig²,

Bos³

et al. 2021

Science and Practice for an Uncertain Future

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Floods can be a cause of poverty. Poverty itself magnifies the impact of floods as poor people are more vulnerable and less resilient. Traditional flood risk assessments (FRAs) focus mostly on asset damages. Yet, poor people own little assets and are often highly exposed to floods. Consequently, traditional FRAs often conclude that it is inefficient to protect the poor and are thus biased against flood risk reduction measures protecting them. The aim of this study is to evaluate FRRIs in a CBA based on the social welfare flood risk reduction benefits. A framework to assess the social welfare flood risk through a Monte Carlo approach is presented herein. A case study illustrates that it is not yet reliable to economically evaluate FRRIs based on the monetized social welfare benefits in CBAs. In addition, a targeted social protection scenario emphasizes the potentially high social welfare benefits that can be realized through risk transfer. Therefore, poverty reduction through risk transfer mechanisms should be considered as a holistic approach to foster socioeconomic growth as such risk transfer mechanisms build socioeconomic resilience in the face of natural disasters. It could have a considerable impact on the lives of people living in vulnerable areas.

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Disaster risk reduction and international catastrophe risk insurance facility

Cited by 18 publications

References 10 publications

A systematic literature review on sustainability issues along the value chain in insurance companies and pension funds

A systematic literature review on sustainability issues along the value chain in insurance companies and pension funds

Climate risk insurance in Pacific Small Island Developing States: possibilities, challenges and vulnerabilities—a comprehensive review

Shifting from asset damage to well-being loss within flood risk management

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