 Environmental insurance and resilience in the age of natural disastersSimone Borghesi, Ilaria Colivicchi, Gianluca Iannucci and Alessandro Tampieri Ecological Economics, 2026, vol. 239, issue C Abstract: The emergence of natural disasters induces a trade-off in the environmental insurance market. While firms need more coverage against large potential losses, the higher damage caused by accidents increases the cost of insurance. As a result, firms may choose to switch to resilient production, which reduces the severity of environmental damage and exempts the firm from paying an emissions tax. We study this problem in a duopoly industry where two risk-averse firms choose their type (resilient or non resilient) based on their production strategy, and their demand for insurance against financial losses caused by environmental accidents. Our results highlight a non-trivial interaction between insurance demand and technology choice: a resilient firm demands lower insurance coverage when the cost of implementing the resilient technology is relatively low. The emergence of natural disasters ultimately favours the adoption of resilient production methods. Keywords: Demand for insurance; Endogenous loss; Environmental loss (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:eee:ecolec:v:239:y:2026:i:c:s0921800925002605 DOI: 10.1016/j.ecolecon.2025.108777 Access Statistics for this article Ecological Economics is currently edited by C. J. Cleveland More articles in Ecological Economics from Elsevier |
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