XVIII IWRA World Water Congress Beijing China 2023
Sub-theme 3: Building Resilience for Disaster Prevention and Mitigation
Author(s): Shibo Cui, Jiaqing Wang, Jianshi Zhao
Shibo Cui, Jiaqing Wang, Jianshi Zhao
State Key Laboratory of Hydro Science and Engineering, Department of Hydraulic Engineering, Tsinghua University, Beijing, China
Poster: PDFAbstractKeypoints
- Floodinsurance can accelerate post disaster recovery andreduce indirect losses caused by floods However, pastflood insurance models have mainly focused on micro levelindividuals, ignoring its macro level positive externality Thispaper establishes a macroeconomic assessment modelthat considers the positive externality of flood insurance
- Inthis macro level flood insurance model, considering thepositive externality can significantly improve the economicfeasibility of flood insurance This includes the positiveimpact of flood insurance on the national economy and themaximum risk premium that flood insurance companies cancharge The research finds that more countries shouldimplement flood insurance
- Theeconomic feasibility of flood insurance is mainlyinfluenced by the flood risk characteristics of the insuredcountries, especially the variability of annual flood lossesThe variability of annual flood losses has a negative effecton promoting flood insurance, as the higher its value, thehigher the risk premium that needs to be paid
- Accordingto the economic theory, positive externalityproblems typically require government intervention Wesuggest that the government should take the lead infacilitating a co insurance agreement