Abstract. Insurance can be an important mechanism to stimulate flood risk reduction and
thus decrease losses. However, there is a gap between the theoretical
potential described by academic scholars and the actual engagement of
insurers. In the analysis, I have collected examples of insurers' engagement
in flood risk reduction, focusing on household and business insurance in
developed countries. Insurers engaged either directly, e.g., through
co-financing risk reduction, or more indirectly by giving incentives to
policyholders or governmental actors to adopt risk reduction measures. I
analyzed their engagement with the framing conditions of the market they were
acting in, such as market penetration or private or public insurance schemes.
I found risk reduction measures like awareness-raising campaigns targeting
citizens to be quite common across several countries. There was less
insurance engagement in risk reduction measures such as warning or land-use
planning, which are perceived to be mainly governmental tasks. The use of
risk-based pricing as an incentive for the adoption of risk reduction
measures as suggested by academia is difficult in practice, due to barriers
such as information gaps on the effectiveness of property-level protection
measures and requirements concerning the affordability of insurance. New
approaches to overcome these shortfalls include organized data collection on
property-level protection measures or the insurance of high-risks for
affordable premiums in public–private partnership constellations with the
government.