The demand for index-based flood insurance in a high-income country

Martin Achtnicht and Daniel Osberghaus

No 16-051, ZEW Discussion Papers from ZEW - Leibniz Centre for European Economic Research

Abstract: Flood insurance helps to cope with the risk of flooding, but take-up rates are relatively low. Insurance density could rise if index-based insurance (IBI) were provided as an alternative to traditional damage-based insurance (DBI). We analyze whether there is potential for private demand for IBI in Germany. We use data from a discrete choice experiment combined with damage data for a major flood in 2013. We find IBI to attract similar customers as DBI, while DBI is preferred on average. Our results suggest that not many new customers would enter the market, once IBI were available.

Keywords: Climate Change; Discrete Choice Experiment; Floods; Insurance; Index-based (search for similar items in EconPapers)
JEL-codes: D14 G22 Q54 (search for similar items in EconPapers)
Date: 2016
New Economics Papers: this item is included in nep-dcm and nep-ias
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https://www.econstor.eu/bitstream/10419/144156/1/863153771.pdf (application/pdf)

Related works:
Journal Article: The Demand for Index‐Based Flood Insurance in a High‐Income Country (2019)
Journal Article: The Demand for Index-Based Flood Insurance in a High-Income Country (2019)
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Persistent link: https://EconPapers.repec.org/RePEc:zbw:zewdip:16051

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