Insurance against natural catastrophes: balancing actuarial fairness and social solidarity

Arthur Charpentier (), Laurence Barry and Molly R. James
Additional contact information
Arthur Charpentier: Université du Québec à Montréal (UQAM)
Laurence Barry: Chaire PARI - DataStorm
Molly R. James: UFR des Sciences et Techniques

The Geneva Papers on Risk and Insurance - Issues and Practice, 2022, vol. 47, issue 1, No 4, 50-78

Abstract: Abstract Natural disasters offer a specific case study of the mix of public and private insurance. Indeed, the experience accumulated over the past decades has made it possible to transform poorly-known hazards like flood losses, long considered uninsurable, into risks that can be assessed with some precision. They exemplify, however, the affordability issue associated with risk-based premiums. The French scheme reflects such ideas and offers wide coverage for moderate premiums to all, but is questioned in its principle by climate change: we show that some wealthier areas that were not perceived as ‘at risk’ in the past have now become exposed to submersion risk. This singularly makes some well-off properties the potential main beneficiaries of a scheme that was historically thought to protect the worst-off. Acknowledging that some segmentation may become desirable, we examine several models for flood risk and the disparity in premiums they entail.

Keywords: Natural disasters; Actuarial fairness; Solidarity; Climate change; Flood; France (search for similar items in EconPapers)
Date: 2022
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

Downloads: (external link)
http://link.springer.com/10.1057/s41288-021-00233-7 Abstract (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:47:y:2022:i:1:d:10.1057_s41288-021-00233-7

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

DOI: 10.1057/s41288-021-00233-7

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 ().