This study applies Bayesian Inference to estimate flood risk for 53 dyke ring areas in the Netherlands, and focuses particularly on the data scarcity and extreme behaviour of catastrophe risk. The probability density curves of flood damage are estimated through Monte Carlo simulations. Based on these results, flood insurance premiums are estimated using two different practical methods that each...

As flood risks grow worldwide, a well-designed insurance program engaging various stakeholders becomes a vital instrument in flood risk management. The main challenge concerns the applicability of standard approaches for calculating insurance premiums of rare catastrophic losses. This article focuses on the design of a flood-loss-sharing program involving private insurance based on location-spe...

Inland riverine flooding from tropical cyclones (TCs) is responsible for significant economic losses in the United States. Yet, most hurricane loss assessment efforts are focused on coastal areas. Hurricane Irene, which struck the U.S. east coast in 2011, provides a recent and poignant example: while intense media coverage and preparation and evacuation activities focused on the projected coast...

Applying a hedonic difference-in-differences framework to a census of residential property transactions in New York City 2003-2016.5, we estimate the effects of 3 flood risk signals: 1) the Biggert-Waters Flood Insurance Reform Act of 2012, which increased premiums; 2) Hurricane Sandy; and 3) new FEMA floodplain maps. On average each signal decreases sale prices by approximately 5 percent. Prop...

Floods in the U.S. kill an average of 162 people each year and cause $3.4 billion in property damage. Flood control programs have been successful in lowering, but not eliminating, the risks to lives and property. Since the late 1960s, the federal government has emphasized flood insurance as a primary tool for improving location and flood-proofing decisions, as well as for reimbursing flood loss...

My work within a research project studying flood-risk management in Hungary is described, with special attention on loss-spreading instruments, mainly insurance. I argue that computer simulation tools are useful in catastrophe policy making. Computer simulation provides a method for estimating the consequences of different potential policy strategies. In decision making processes it also forces...

Climate change is projected to cause severe economic losses, which has the potential to affect the insurance sector and public compensation schemes considerably. This article discusses the role insurance can play in adapting to climate change impacts. The particular focus is on the Dutch insurance sector, in view of the Netherlands being extremely vulnerable to climate change impacts. The usefu...

Since 1968, homeowners’ flood insurance in the United States has been mainly provided through the federally-run National Flood Insurance Program (NFIP). The Flood Insurance Reform Act of 2012 raises the possibility of moving coverage to the private sector, assuming the market can price this risk effectively and that premiums reflect risk. This paper provides the first large-scale quantification...

In recent years, the United States has been severely affected by numerous tropical cyclones (TCs) which have caused massive damages. While media attention mainly focuses on coastal losses from storm surge, these TCs have inflicted significant devastation inland as well. Yet, little is known about the relationship between TC-related inland flooding and economic losses. Here we introduce a novel ...