Index-Based Risk Financing and Development of Natural Disaster Insurance Programs in Developing Asian Countries

2014 ◽  
pp. 171-200 ◽  
Author(s):  
Sommarat Chantarat ◽  
Krirk Pannangpetch ◽  
Nattapong Puttanapong ◽  
Preesan Rakwatin ◽  
Thanasin Tanompongphandh
Keyword(s):  
Natural Disaster ◽  
Asian Countries ◽  
Disaster Insurance

scholarly journals Natural disaster insurance: public-private sector partnership

2019 ◽  
Vol 16 (4) ◽  
pp. 1084-1095
Author(s):  
Tülin Altun ◽  
Nevzat Güldiken
Keyword(s):  
Private Sector ◽  
Natural Disaster ◽  
Risk Mitigation ◽  
Private Insurance ◽  
Financial Risks ◽  
The Public ◽  
Insurance System ◽  
Disaster Insurance ◽  
Fiscal Incentives ◽  
Mandatory Participation

The public sector should intervene in the natural disaster insurance market in order to increase economic efficiency and social welfare. However the governments should not put at risk the sustainability of public finance by undertaking excessive financial risks. Therefore, public-private sector partnership practices in natural disaster insurance are on the agenda. Public-private partnerships can incorporate some of the advantages of both public insurance systems and private insurance systems. In such insurance systems, government guarantees, fiscal incentives, regulations and private sector expertise come together. The insurance systems established in public-private partnership sectors should be designed appropriately to ensure sustainability. A sustainable public-private insurance system should include mandatory participation, risk-based premiums, encouraging risk-mitigation activities, risk transfer mechanisms. NFIP, CEA, CATNAT, TCIP, CCS, JER are successful examples of public-private sector partnership. However, these insurance systems do not have all the features that a good insurance system should have.

scholarly journals Building a Secure Fence and a Well-Functioning Ambulance Reforming New Zealand's Natural Disaster Insurance Scheme

2021 ◽  
Vol 52 (1) ◽  
pp. 137-162
Author(s):  
Hanna Malloch
Keyword(s):  
New Zealand ◽  
Natural Disaster ◽  
Private Insurance ◽  
Dual Model ◽  
Insurance Scheme ◽  
Public System ◽  
Disaster Insurance ◽  
Public Inquiry ◽  
Canterbury Earthquake Sequence ◽  
Insurance Model

This article proposes reform to New Zealand's natural disaster insurance scheme in anticipation of The New Zealand Treasury's (Treasury) 2021 review of the Earthquake Commission Act 1993. The Canterbury Earthquake Sequence of 2010–2011 revealed many shortcomings in New Zealand's dual-insurance model, outlined in the March 2020 Public Inquiry into the Earthquake Commission. Recent changes in the private insurance market have aggravated these problems, notably, increasing premiums and a move to sum-insured policies. This article explores the lesser known background to the unique EQC system and examines the fundamental reasons for this public system. It aims to establish the most effective natural disaster insurance scheme for New Zealand, holding that retaining the dual-model approach is preferable. However, fresh reforms are necessary. Five reforms are proposed: ensuring the scheme's universality; increasing the EQC cap; implementing differentiated pricing; incorporating incentives for mitigation; including a purpose statement within the Act. Implementing these reforms will best ensure the scheme meets the objective of allowing homeowners to build their secure fence at the top of the cliff, while still ensuring there is a well-functioning ambulance at the bottom.

scholarly journals Disaster Response in Indonesia: Initiating Income Tax Policy Pro Disaster Mitigation

2020 ◽  
Vol 5 (2) ◽  
pp. 243-256
Author(s):  
Dini Dubelmar ◽  
Made Astrin Dwi Kartini ◽  
Sabila Mareli ◽  
Murwendah Murwendah
Keyword(s):  
Natural Disaster ◽  
Disaster Response ◽  
Income Tax ◽  
Field Studies ◽  
Disaster Mitigation ◽  
Disaster Insurance ◽  
Tax Allowance ◽  
Income Tax Policy ◽  
The Government

As a country with high potential for natural disaster, Indonesia can suffer from economic disruptions arising from significant decline in gross domestic income (GDP) due to financing losses caused by natural disaster. To reduce the risk of loss caused by natural disasters, the government has issued disaster mitigation policies in the form of structural and non-structural policies. In 2018, the government initiated a disaster mitigation policy in the form of natural disaster insurance prioritized to protect state assets. It does not exclude the possibility that this insurance shall be given to civil society, yet an issue arises regarding the source of funding for the insurance. Tax instruments are expected to be a policy innovation to overcome the issue of financing insurance. The purpose of this study is to explore the potential and role of fiscal policy through tax instruments in the context of disaster management in Indonesia. This study applied a qualitative approach and collected data through field studies and in-depth interviews. The findings of this study indicate that the natural disaster insurance policy may adopt the concept of tax allowance on donation and zakat as stipulated in Law No. 36 of 2008 on Income Tax. This incentive provides a tax facility in the form of tax allowance on income for calculating Income Tax. The policy is expected to attract the community to participate in natural disaster insurance amid the general lack of participation in insurance in Indonesia. On the other hand, the government obtains a source of revenue to finance disaster mitigation without disrupting the economy of the country.

scholarly journals Risk Selection in Natural Disaster Insurance - the Case of France

2006 ◽  
Author(s):  
Mario Jametti ◽  
Thomas von Ungern-Sternberg
Keyword(s):  
Natural Disaster ◽  
Risk Selection ◽  
Disaster Insurance

The Role of Natural Disaster Insurance in Recovery and Risk Reduction

2019 ◽  
Vol 11 (1) ◽  
pp. 399-418 ◽  
Author(s):  
Carolyn Kousky
Keyword(s):  
Risk Reduction ◽  
Natural Disaster ◽  
Climate Adaptation ◽  
Empirical Studies ◽  
Insurance Coverage ◽  
Hazard Mitigation ◽  
Critical Role ◽  
Empirical Work ◽  
Disaster Insurance

Natural disaster losses have been increasing worldwide. Insurance is thought to play a critical role in improving resilience to these events by both promoting recovery and providing incentives for investments in hazard mitigation. This review first examines the functioning of disaster insurance markets broadly and then turns to reviewing empirical studies on the role of natural disaster insurance in recovery and the impacts of disaster insurance on incentives for ex ante hazard mitigation and land use. Rigorous empirical work on these topics is limited. The work that has been done suggests that insurance coverage does improve recovery outcomes, but impacts on risk reduction may be modest. More studies comparing outcomes across insured and uninsured properties are needed, particularly for better understanding the role of insurance in climate adaptation.

Economics of Insurance Against Natural Disaster Risks

2021 ◽  
Author(s):  
W. J. Wouter Botzen
Keyword(s):  
Climate Change ◽  
Risk Reduction ◽  
Natural Disaster ◽  
Supply And Demand ◽  
Insurance Coverage ◽  
Management Strategies ◽  
Economic Losses ◽  
Disaster Insurance ◽  
Starting Point ◽  
Risk Management Strategies

Increasing natural disaster losses in the past decades and expectations that this trend will accelerate under climate change motivated the development of a branch of literature on the economics of natural disaster insurance. A starting point for assessing the implications of climate change for insurance and developing risk management strategies is understanding the factors underlying historical loss trends and the way that future risks will develop. Most studies have pointed toward socioeconomic developments as the main cause of historical trends in natural disaster risks. Moreover, evidence reveals that climate change has been a contributing factor, which is expected to grow in importance in the future. Several supply and demand side obstacles may prevent natural disaster insurance from optimally fulfilling its desirable function of offering financial protection at affordable premiums. Climate change is expected to further hamper the insurability of natural disaster risks, unless insurers and governments proactively respond to climate change, for example by linking insurance coverage with risk reduction activities. A branch of literature has developed about how the functioning of insurance should be improved to cope with climate change. This includes industry-level responses, reforms of insurance market structures, such as public–private natural disaster insurance provision, and recommendations for addressing behavioral biases in insurance demand and for stimulating risk reduction. In view of the rising economic losses of natural disasters, this field of study is likely to remain an active one.

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