Climate change appears to be increasing the frequency and magnitude of extreme weather events, negatively affecting communities as well as posing long-term sustainability challenges to insurance (risk transfer) mechanisms. New Zealand’s public natural hazard insurer, the Earthquake Commission...

In response to the growing threat of climate change, the insurance industry has made significant investments in modelling and quantifying physical climate risks. However, the emerging risk of climate litigation has proven particularly difficult to model. In 2015 Mark Carney, then-Governor of the...

The social cost of carbon is the expected present value of damages from emitting one ton of carbon today. We use perturbation theory to derive an approximate tractable expression for this cost adjusted for climatic and economic risk. We allow for different aversion to risk and intertemporal...

There has been very little research to test whether ambiguity affects individuals' decisions to insure themselves against the catastrophic effects of climate change. This paper attempts to study how individuals respond to the availability of an insurance that would safeguard their interests if a...

In recent years, insurance against natural disasters has gained recognition as an important tool for climate risk management that could, if carefully implemented, help increase the resilience of those insured. In response, insurance solutions are increasingly tested and applied in many countries...

This paper estimates insurance requirements against natural disasters (NDs) in the Eastern Caribbean Currency Union (ECCU) using an insurance layering framework. The layers include a government saving fund, as well as market instruments. Each layer is calibrated to cover estimated fiscal cost of...

Catastrophe insurance markets have changed beyond recognition since the sudden upturn in claims beginning in 1966. There is now a growing tendency for risk manager to bypass traditional insurance markets, and a variety of instruments designed directly to transfer risk to the financial markets....

Extreme events are becoming more frequent and intense, inflating the economic damages and social hardship set-off by natural catastrophes. Amidst budgetary cuts, there is a growing concern on societies' ability to design solvent disaster recovery strategies, while addressing equity and...

The aim of this article is to analyze the concept of “vulnerability” to natural disasters, focusing on the specific case of the Italian earthquake insurance. In this sense, we examine in detail the vulnerability definition and its relevance for citizens and for insurance companies. Then we...

Federal disaster insurance - in the form of national flood insurance, the Federal Emergency Management Agency (FEMA), and other programs - is designed to nationally distribute large geography-specific shocks such as earthquakes and hurricanes. This study examines how residents were affected on...