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The primary aim of this study was to develop a model of a socially inclusive climate risk insurance (CRI) mechanism based on the differential risk transfer approach. This study focused on the department of La Guajira, Colombia, as a case study. La Guajira is the department in Colombia that, due to its critical disaster risk conditions, presents the adequate configuration for implementing a climate risk transfer mechanism. The article starts by analyzing risk conditions by using secondary data. Based on fieldwork, this research explored the perspectives of the most vulnerable sectors in La Guajira Department on the socioeconomic impacts and needs they experience regarding climate-related hazards, their adaptive measures for risk reduction, and their willingness to adopt CRI. This represents the fundamental input for the formulation of the CRI model. Consequently, this research proposed an operational structure as input for future implementations of the model. The results indicate that national and local disaster risk management public policies align with the sectors' needs and priorities. Strengthening sectoral associations can enhance representation in CRI projects. In-kind indemnization is preferred for women entrepreneurs and the indigenous community. The CRI model includes a risk pool through the family compensation fund of La Guajira as a sectoral agglomerator, with contingent credit and traditional/parametric insurance. The methodology developed in this study can be applied in different contexts worldwide as a guidance for informing national and international climate risk finance initiatives. [ABSTRACT FROM AUTHOR]

Understanding the heterogeneous preferences of individuals for disaster insurance attributes is critical for product improvement and policy design. In an era of global environmental change, the Qinghai-Tibet Plateau is a hotspot of natural hazards. Improving the capability of rural housing disaster insurance to foster local residents' disaster resilience is of great significance but remains under addressed. We used a discrete choice experiment approach to provide the first estimates of rural residents' preferences for rural housing disaster insurance attributes in central and western Tibet. We estimated residents' preferences and willingness-to-pay for the sum insured, subsidy rate, insured object, and perils covered. The potential impacts of increasing the sum insured, expanding the insured object, and lowering subsidy rates were evaluated. Our results suggest that residents prefer products with a high sum insured, high subsidy rate, and a complete list of insured objects. Residents who have experienced specific hazards tend to prefer the corresponding perils covered. Females and residents who have a closer social network are more likely to purchase insurance. Product improvement and policy simulation results suggest that, while lowering the subsidy rate, increasing the sum insured and expanding the insured object could promote participation and improve residents' welfare. Our results could improve the understanding of the preferences of households in remote regions and support policy implementations. [ABSTRACT FROM AUTHOR]

In order to examine the effect of spatial scale and building exposure distribution on the pure rate of earthquake catastrophe insurance, this study described three modules for rate determination, put forward the general assumptions and principles for calculating the pure insurance rate, and introduced three types of building distribution and their calculation. Taking Tangshan City of Hebei Province in China as an example, we analyzed the pure rate of regional earthquake insurance in terms of spatial scale and building exposure distribution by using the method of control variables. The results show that for districts (or counties) with large differences in seismic risk, the risk areas can be further divided to apply differential rates. In areas with a diverse distribution of potential earthquake source areas and large differences in building density, there is a risk of overestimating or underestimating the pure rate of earthquake insurance when buildings are distributed evenly or partially evenly. This violates the break-even principle of rate setting. This study also provides a reference for earthquake catastrophe insurance companies to choose the spatial scale and the detailed level of exposure distribution in rate determination. [ABSTRACT FROM AUTHOR]

Indonesia is an archipelago country and is fairly vulnerable to disasters. While disasters generally affect government revenue and expenditure, their effects likely vary by country. This study examines the effect of disasters on the fiscal balance, revenue, and expenditure of local governments. We used panel data and fixed effects methods to estimate the degree to which disaster severity influences budgetary solvency at the district and provincial levels in Indonesia between 2010 and 2018. This study revealed that disasters can strain fiscal balance at the district and provincial levels due to a decrease in own-source revenue and an increase in social assistance expenditure, capital expenditure, consumption expenditure, and unexpected expenditure. The district expenditure most threatened by disasters is consumption expenditure, while the provincial expenditure most threatened is unexpected expenditure. We also found that an increase in capital expenditure can lead to financial burden due to delays of planned projects or post-disaster reconstruction. Based on these findings, it is clear that some forms of insurance or other financing schemes are necessary to mitigate the adverse impacts of disasters on regional fiscal balance. [ABSTRACT FROM AUTHOR]

Abstract Economic damage due to hurricane activities has been shown to impact income inequality in the coastal states of the United States. We consider 17 other natural hazards, in addition to hurricanes, that affected the entire United States for the period 1970–2013. Two fixed effects models were developed to quantify the relationship between income inequality and economic and demographic variables, including crop and property losses from natural hazard-induced disasters. These models include state-by-year and region-by-year fixed effects models. Our findings show that the damages from all natural hazards impact income distribution across the United States, not only in hurricane-affected areas, but also in non-hurricane states. The results of our study have important implications for the insurance industry and government policymakers.

Economic damage due to hurricane activities has been shown to impact income inequality in the coastal states of the United States. We consider 17 other natural hazards, in addition to hurricanes, that affected the entire United States for the period 1970-2013. Two fixed effects models were developed to quantify the relationship between income inequality and economic and demographic variables, including crop and property losses from natural hazard-induced disasters. These models include state-by-year and region-by-year fixed effects models. Our findings show that the damages from all natural hazards impact income distribution across the United States, not only in hurricane-affected areas, but also in non-hurricane states. The results of our study have important implications for the insurance industry and government policymakers. [ABSTRACT FROM AUTHOR]

A fully probabilistic seismic risk assessment was developed in Manizales, Colombia, considering assets of different types. The first type includes elements that are part of the water and sewage network, and the second type includes public and private buildings. This assessment required the development of a probabilistic seismic hazard analysis that accounts for the dynamic soil response, assembling high resolution exposure databases, and the development of damage models for different types of elements. The economic appraisal of the exposed assets was developed together with specialists of the water utilities company of Manizales and the city administration. The risk assessment was performed using several Comprehensive Approach to Probabilistic Risk Assessment modules as well as the R-System, obtaining results in terms of traditional metrics such as loss exceedance curve, average annual loss, and probable maximum loss. For the case of pipelines, repair rates were also estimated. The results for the water and sewage network were used in activities related to the expansion and maintenance strategies, as well as for the exploration of financial retention and transfer alternatives using insurance schemes based on technical, probabilistic, and prospective damage and loss estimations. In the case of the buildings, the results were used in the update of the technical premium values of the existing collective insurance scheme. [ABSTRACT FROM AUTHOR]

The purpose of this study is to investigate the effect of farmers' risk preferences on their decisions to purchase the agricultural weather index insurance based on the evidence from a household survey and field experiments conducted in Yongqiao District, Suzhou City of Anhui Province in China. Our empirical results show that farmers' risk aversion significantly increases the probability of their decision to buy weather index-based crop insurance. Other factors that significantly influence weather index insurance participation decisions include farmers' subjective beliefs on the probability of crop losses, farming experience, education level, farm size, and their household income. The empirical results of this study can provide helpful insights for policymakers and local insurers to further improve farmers' participation in weather index-based crop insurance. [ABSTRACT FROM AUTHOR]