The Insurance of Natural Hazards: Proposals to an Appropriate Risk Partnership Between Insurers, Reinsurers, the Government and the Policyholders

Burkhardt Meyer

The Geneva Papers on Risk and Insurance - Issues and Practice, 1996, vol. 21, issue 3, 393-400

Abstract: The coverage of natural hazards through the private insurance industry is possible if it is based on a sensible risk partnership. A partnership between the insurance and reinsurance industry, the policyholders and the government for establishing the legal framework or, if necessary, as reinsurer of last resort. Solutions involving compulsory insurance and flat premiums or other interventionist measures are comparatively disadvantageous. They often assume the form of taxes that are levied among the population as a whole but are redistributed among only a minority. They offer no incentive to avoid endangered regions or to take steps to prevent or reduce loss. This leads to a steady increase in loss potential resulting from the subsidizing of poor risks. And this is undesirable at least in the long term since it results, as only too often in the case of subsidies of all kinds, in the faulty allocation of economic resources. In many cases the capacity provided by the insurance industry is sufficient to cover the risk of natural catastrophes.

Date: 1996
References: Add references at CitEc
Citations:

Downloads: (external link)
http://www.palgrave-journals.com/gpp/journal/v21/n3/pdf/gpp199627a.pdf Link to full text PDF (application/pdf)
http://www.palgrave-journals.com/gpp/journal/v21/n3/full/gpp199627a.html Link to full text HTML (text/html)
Access to full text is restricted to subscribers.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:pal:gpprii:v:21:y:1996:i:3:p:393-400

Ordering information: This journal article can be ordered from
http://www.springer.com/finance/journal/41288/PS2

Access Statistics for this article

The Geneva Papers on Risk and Insurance - Issues and Practice is currently edited by Christophe Courbage

More articles in The Geneva Papers on Risk and Insurance - Issues and Practice from Palgrave Macmillan, The Geneva Association Contact information at EDIRC.
Bibliographic data for series maintained by Sonal Shukla () and Springer Nature Abstracting and Indexing ().