The role of insurance in integrated disaster & climate risk management: Evidence and lessons learned

Le Quesne, Felicity, Tollmann, Jennifer, Range, Matthias, Balogun, Kehinde, Zissener, Michael, Bohl, Daniela, Souvignet, Maxime, Schuster, Sandra, Zwick, Sabrina, Phillips, Jennifer, Wehnert, Branko and Kreft, Soenke (2017). The role of insurance in integrated disaster & climate risk management: Evidence and lessons learned. Report. UNU-EHS.

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    Author Le Quesne, Felicity
    Tollmann, Jennifer
    Range, Matthias
    Balogun, Kehinde
    Zissener, Michael
    Bohl, Daniela
    Souvignet, Maxime
    Schuster, Sandra
    Zwick, Sabrina
    Phillips, Jennifer
    Wehnert, Branko
    Kreft, Soenke
    Title The role of insurance in integrated disaster & climate risk management: Evidence and lessons learned
    Series Title Report
    Volume/Issue No. 22
    Publication Date 2017-10
    Place of Publication Bonn, Germany
    Publisher UNU-EHS
    Pages 68
    Language eng
    Abstract Insurance has an important role to play in disaster and climate risk management. This role is well-recognised in terms of response and recovery, where the rapid and predictable pay-out and resulting effect of smoothing of the fiscal impacts of shocks can be highly valuable. More recently, there has been increased emphasis on the question of whether, and how, insurance can contribute to the management of residual risk, risk preparedness and risk prevention? However, insurance is no panacea. Its contribution to risk reduction and resilience depends upon the quality of the insurance tool and whether it has been designed to respond efficiently to the needs of the policyholder(s) or final beneficiaries. It is not a cost-effective approach for managing all types of risk. If designed poorly or targeted inappropriately, insurance may not contribute meaningfully to risk reduction or greater resilience in all cases. Indeed, in some cases poorly-thought-through insurance schemes may result in increasing vulnerability and/or exposure. Therefore, it is essential that insurance is incorporated within an integrated approach to disaster and climate risk management, where its role in relation to each element of risk management is determined through risk assessment and identification of risk layers. Furthermore, strategies to manage risk such as insurance should be combined with efforts to reduce the drivers of risk; this is particularly important for building resilience among the poor. This paper reviews the empirical evidence relating to when and how insurance can contribute to disaster and climate risk management. Aspects explored include the contribution of insurance to relating to, or even creating the macro-conditions for, resilience to disasters in terms of public finance, economic growth and good governance; the contribution of insurance to risk prevention, preparedness, response and recovery; and the factors that influence the provision of insurance by companies and governments, and uptake of insurance by governments and households. Findings and conclusions from the empirical review are provided, and links are drawn with the key concepts of risk layering and Integrated Climate Risk Management (ICRM).
    Keyword Climate Risk Insurance
    Climate risk management
    Integrated climate risk management
    Risk transfer
    Copyright Holder UNU-EHS
    Copyright Year 2017
    Copyright type Creative commons
    ISBN 9783944535555
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    Created: Tue, 31 Oct 2017, 22:51:00 JST by Aarti Basnyat on behalf of UNU EHS