Assessing the drivers of flood risk reduction actions of businesses

Vylon Ooms (), Thijs Endendijk, Jeroen C. J. H. Aerts, W. J. Wouter Botzen and Peter John Robinson
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Vylon Ooms: Institute for Environmental Studies (IVM)
Thijs Endendijk: Institute for Environmental Studies (IVM)
Jeroen C. J. H. Aerts: Institute for Environmental Studies (IVM)
W. J. Wouter Botzen: Institute for Environmental Studies (IVM)
Peter John Robinson: Institute for Environmental Studies (IVM)

The Geneva Papers on Risk and Insurance - Issues and Practice, 2025, vol. 50, issue 2, No 3, 335-364

Abstract: Abstract Climate change and socio-economic development are expected to increase flood risk. Businesses can prepare for increasing flood risk by taking flood damage mitigation (FDM) measures, or by purchasing insurance. However, little is known about the predictors of the uptake of various FDM measures by businesses. Our study uses survey data after flooding in the Netherlands in 2021 to understand the drivers of FDM actions of businesses. Our results indicate that insured businesses are neither significantly more or less likely to take FDM measures compared to uninsured businesses. Therefore, we do not see evidence of moral hazard or advantageous selection. Positive predictors of FDM uptake are receipt of early warnings, searching for information about flood risk, prior flood experience and feelings of responsibility for taking FDM measures. Our results show that insurers can stimulate FDM uptake of businesses via early warnings and information provision.

Keywords: Flood insurance; Businesses; Damage mitigation; Flooding; Adaptation (search for similar items in EconPapers)
Date: 2025
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DOI: 10.1057/s41288-024-00338-9

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