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Catastrophe-related insurance (e.g. business interruption insurance) is an effective financing tool for global corporations to reduce economic losses caused by high impact events. Flexible operational planning is an often-used tool enabling rapid adjustment of operational plans for reducing catastrophe-related damage costs. The interaction between catastrophe insurance and flexible operations planning has rarely been studied. In this paper, we develop a stochastic programming model for a multi-echelon global supply chain network that we solve to investigate the impact of purchasing catastrophe insurance on supply chain operational planning in a catastrophe-prone environment. Computational simulations are developed for evaluating solution quality and measuring catastrophe-related damage costs. We find that it may be optimal for supply chains to scrap redundant products in catastrophes when customer demand falls below the expected level. Purchasing catastrophe insurance may encourage supply chains to scrap more products, which results in more catastrophe-related damages. From analysing supply chain costs, catastrophe-related damage costs, and operational plans, we find that a higher compensation rate of catastrophe insurance triggers more production activities being planned at the vulnerable node just before the vulnerable time period, especially for low residual value products. Finally, we give managerial insights to help reduce unnecessary damages in catastrophes. [ABSTRACT FROM AUTHOR]

Smallholder fishery communities are acutely vulnerable to the impacts of climate variability, driven by their geographic exposure and heavy dependence on natural resources. This research aims to assess livelihood vulnerability to climate change in two coastal communities in Central Vietnam, employing the Livelihood Vulnerability Index informed by the IPCC framework (LVI-IPCC). Quantitative data were gathered through structured surveys with 750 fishing households, while qualitative data were derived from focus group discussions, expert interviews, and field notes. The findings reveal a moderate vulnerability level in both communities, with an LVI-IPCC score of 0.5. This study elucidates the significance of educational attainment in mitigating vulnerability, empirically demonstrating that enhanced scholastic achievement and training courses among household heads correlate significantly with improved climate risk literacy and adaptive capacity. Additionally, the study highlights the intricate interconnections among vulnerability drivers, including narrow asset portfolios, limited social networks, and restricted income sources, which collectively intensify household poverty. The results emphasise the imperative of integrating poverty reduction strategies into the development of climate adaptation programmes and community resilience policies. Key recommendations include implementing small-scale credit programmes, establishing disaster insurance schemes, promoting income diversification, and fostering stronger community cohesion. While grounded in the context of Vietnamese fishing communities, these insights offer a transferable framework for fostering resilience among similarly vulnerable populations globally. [ABSTRACT FROM AUTHOR]

The grand challenges society faces compel strategy and organization scholars to engage meaningfully with practice and contribute toward solution development. As global complexities escalate, the importance of addressing these challenges intensifies. While the notion of "impact" in organization theory remains elusive, a recent surge in scholarly work highlights the tensions and challenges associated with conducting impact-driven research. In this essay, we reflect on our 15-year program of research into financial responses to disasters, illustrating the process of doing impact through activities of "translating, 'co-creating," and "performing." We show how these activities fostered the emergence of new research questions, new collaborations, and novel impacts. Based on our journey, we generate four reflexive insights. First, translating, co-creating, and performing are an iterative, rather than sequential, process in which these activities partly overlap and build cumulatively on each other. Second, a flexible yet robust impact object is crucial. Third, while co-creation is indispensable, it is also, often, contentious. Finally, impactful research necessitates humility, courage, and persistence. [ABSTRACT FROM AUTHOR]

The lack of separate statistics on wind and rain damage by disaster-causing factors in the typhoon disaster data in Guangdong is a contributing factor to the existence of typhoon catastrophe index insurance basis risk. To mitigate this basis risk, this paper proposes a method to separate typhoon wind and rain damage. An analysis was conducted on the typhoon disaster data from 2014 to 2022 for 36 counties (districts) in nine coastal cities in Guangdong, focusing on wind and rain indicators. A multiple regression method was employed to construct a typhoon wind and rain disaster loss separation model, which separated the disaster loss due to wind and rain in the typhoon disaster statistics of each county (district). Furthermore, the typhoon observation data and direct economic loss data from Jiangmen Taishan city and Xiangqiao district of Chaozhou were presented as case studies to illustrate the model's validation. Linear correlation analysis showed that eliminating or reducing the effect of multicollinearity on the regression equation at the beginning of modeling may result in the loss of some valid information. The Gamma distribution was found to appropriately fit the distribution pattern of typhoon wind, rain, and damage in Guangdong. The results indicated that 22 counties (districts) passed the significance test at the 0.05 level. The model successfully separated wind- and rain-related damage in Guangdong's typhoon disaster loss statistics, providing a valuable reference for categorizing and analyzing typhoon disaster data by cause. [ABSTRACT FROM AUTHOR]

Based on an accurate assessment of the risks of agricultural production, together with the information required for insurance policies, the reasonable design and evaluation of insurance products is an important guarantee for the sustainable development of China's agricultural insurance policies. According to historical meteorological data as well as rice growth stage and yield data, based on the construction of meteorological index for rice high temperature disaster insurance, combined with comprehensive regionalization and assessment of insurance risk in Jiangsu province, by setting different deductible amounts, insurance pure rates were set and corresponding products were designed. In addition, a comprehensive evaluation of the effectiveness of the application of the rice heat damage meteorological index insurance product has been achieved by using three methods: index evaluation, historical retrospective analysis, and analysis of typical heat damage events. The study found that under different deductible amounts for yield reduction rates, the determined pure insurance rates for rice high-temperature heat damage in various counties in Jiangsu province exhibited a distribution pattern of "high in the southwest and low in the northeast". The deductibles were ultimately determined to be 2.5% for low-risk, 2.5% for medium-risk and 7.5% for high-risk areas, after taking into account the incentives for farmers to participate and the level of coverage. The corresponding pure insurance rates were determined to be 5.09%, 5.27% and 5.26% respectively. The designation of this index insurance product was relatively reasonable from the point of view of the company's operational efficiency, loss compensation pressure, level of risk transfer and coverage of the farmer's production. In low-risk, medium-risk, and high-risk areas, the operational sustainability indices of insurance companies were 14%, 37%, and 76%, respectively, while the stability indices of farmer production security were 6%, 9%, and 21%, respectively, and the average compensation rates for high-temperature heat damage events were 111%, 122% and 303%, respectively. In typical high-temperature heat damage years, the average compensation amount in Jiangsu province exceeded 1800 yuan·ha-1, and the number of compensation counties accounted for more than 50%. The results of this study may serve as references for the evaluation of the operational characteristics of meteorological index insurance products, as well as for the adjustment of insurance product design schemes, and the promotion and implementation of insurance products. [ABSTRACT FROM AUTHOR]

Doğal afetler, gerekli planlama yapılmadığı takdirde, gelişmişlik düzeyi ne olursa olsun meydana geldiği ülkelerde önemli mali ve ekonomik risklere neden olmaktadır. Doğal afetlerden kaynaklanan mali risklerin azaltılması amacıyla afet öncesi güçlendirme çalışmaları, afet sonrası müdahale önceliklerinin belirlenmesi ve yerel yönetimlerle risk paylaşımı gibi koşullu yükümlülükler afet yönetiminde etkili bir araç olarak kabul edilmektedir. Afet risk yönetiminde koşullu yükümlülükler, gelişmiş ülkeler başta olmak üzere dünyanın birçok ülkesinde yaygın olarak kullanılmaktadır. Bu çalışma, başta deprem ve sel olmak üzere doğal afet riski yüksek olan Türkiye'de, afetin yol açtığı mali risklere hazırlıklı olmak ve üzerindeki yükü azaltmak amacıyla devletin koşullu yükümlülükleri etkin bir şekilde kullanmasını amaçlamaktadır. Bu bağlamda, çeşitli ülkelerde uygulanan koşullu yükümlülükler incelenecek ve Türkiye için çıkarımlarda bulunulacaktır. Türkiye’de afet öncesi gerekli önlemlerin alınması, afet sonrası ortaya çıkabilecek zararların tazmin edilmesi ve yeniden yapılandırılmanın sağlanması amacıyla hangi adımların atılacağı ve kimlerle işbirliği yapılacağı açık koşullu yükümlülükler ile net olarak belirlenmelidir. Bu doğrultuda devlet kademeleri arasında yetki paylaşımı anlaşmaları yapılmalı, yükümlülüklerin üst sınırının ne olacağı belirlenmeli ve bu sınırın aşılmayacağı açıkça belirtilmelidir. Ayrıca, bireylerin afet önleme tedbirlerini ve risk transferini teşvik edecek şekilde, bireysel hanelerin uğradığı kayıplara yönelik devlet desteği planlanmalıdır. Koşullu yükümlülüklerin azaltılması amacıyla doğal afet sigortası ve afet fonu gibi afet öncesi finansman araçlarının daha yaygın kullanılması için gerekli adımlar atılmalıdır.

Climate change is forever changing the risk environment for insurers and their customers. A recent example of this is the intense storm witnessed by the people of Bahrain and around the region on the eve of 16th April, 2024. There were minimal preparations made by either insurers or their customers, resulting in severe disruptions to daily life and property damage. To mitigate this, insurers need risk management programmes that move beyond traditional solutions to deal with climate change. These risk management solutions must be varied to cover all aspects of an insurance operation and provide customer value. Solutions can be focused on changing policy cover terms, new product development, altered investment strategies, use of technology and innovation, and engagement with the public. There are challenges, however, such as the availability and credibility of data, affordability and social equity, uncertain regulations and rising costs. Yet, the consequences of not acting on climate change will be higher for insurers eventually. [ABSTRACT FROM AUTHOR]

This study provides a comprehensive review of the literature on climate risk insurance modeling to identify lessons learned and knowledge gaps to be addressed by future research. These models are increasingly relevant due to the rising losses attributable to climate change. Insurance models estimate risk for different perils and simulate risk‐related parameters for insurance schemes, such as premiums and deductibles. Most forward‐looking models indicate that climate change and socioeconomic developments highly exacerbate future risk and increase insurance premiums. Various studies recommend charging risk‐based premiums to incentivize adaptation efforts that limit this increase in climate risks. Other findings point toward introducing public–private insurance to cope with climate change and enhance risk spreading by introducing insurance purchase requirements or insurance products that cover multiple climate risks. Gaps that we identify in this literature include an underrepresentation of insurance assessments for developing countries and for hazards other than flooding. Additionally, we note a lack of research into insurance for non‐agricultural commercial sectors. Furthermore, less than half of the studies take a forward‐looking approach by incorporating climate change scenarios, and an even smaller percentage consider socioeconomic development scenarios. This limitation shows that current methods require additional development for assessing the effects of future climate risk on insurance. We recommend that future research develops such forward‐looking models, considers using a more refined spatial scale, broadens geographical and hazard coverage, and includes the commercial sector. [ABSTRACT FROM AUTHOR]

This article advocates smart mixes of mechanisms of post-disaster recovery in terms of boosting resilience and sustainability through liability rules, government intervention, insurance, and their combinations. Liability rules can provide compensation to victims and, in theory, also reduce disaster risks, while they have their limits in practice. The government widely intervenes in disaster compensation in many countries, but it faces challenges in how it can intervene fairly and efficiently, whether through informal channels, such as ad hoc charity, or structured approaches, such as compensation funds. As governments may struggle to provide efficient and effective compensation ex post, insurance may offer proactive solutions with models of first-party catastrophe insurance and third-party liability insurance ex ante. Where market failure, liability failure, and government failure may all arise, a smart mix of mechanisms is often preferable from a law and economic perspective, rather than relying solely on one framework. However, upon examining empirical evidence regarding the effectiveness of these instruments in China, the UK, France, Germany, and Turkey, it becomes apparent that a mix of mechanisms is not always applied in an effective manner. Models of mandatory comprehensive disaster insurance, and Public–Private Partnership (PPP), which both receive government intervention as a last resort to the market and liability failures, can reach the goal of more effective compensation for disaster victims, risk prevention and resilience when faced with disaster recovery, and should therefore be substantially implemented beyond the current levels. To be clear, the proposed mix of solutions mainly focuses on legal and economic dimensions which are rather limited, ignoring, for example, building codes for structures and physical interventions. [ABSTRACT FROM AUTHOR]

In China’s agricultural catastrophe insurance market, issues of non-equilibrium are prominent. To understand the causes of non-equilibrium in agricultural catastrophe insurance and to develop prevention strategies, this study employs an Evolutionary Game Model, incorporating disaster and insurance data for three types of cereal crops in Henan Province to analyse the Evolutionarily Stable Strategies in the agricultural catastrophe insurance market. The research also considers government policies and disaster reinsurance as implicit participants in the model. The findings reveal significant differences in the impact of non-equilibrium in the agricultural catastrophe insurance market and the choice of game strategies, dependent on the scale of farm operations, the type of crops cultivated, and regional variations. Significantly, decision-making evolutionary paths vary between small and medium-scale farmers, with rice growers emphasising income insurance more. In regions prone to frequent catastrophes, the insurance rates for agricultural catastrophe insurance exhibit greater flexibility. By scientifically delineating agricultural catastrophe risk zones, appropriately expanding the scale of cultivation, reducing insurance rates, and adjusting agricultural catastrophe insurance products, a balanced development in the agricultural catastrophe insurance market can be promoted. [ABSTRACT FROM AUTHOR]

This systematic literature review (SLR) explores the role of community-based catastrophe insurance (CBCI) as a tool for sustainable economic loss risk mitigation. Utilizing bibliometric analysis and a literature review, this study aims to reveal the methods employed in CBCI schemes from a novel perspective, highlighting their effectiveness in mitigating catastrophe risks. The PRISMA (Preferred Reporting Items for Systematic Reviews and Meta-Analyses) methodology was employed to systematically collect and analyze articles sourced from the Scopus, ScienceDirect, and Dimensions databases. The findings provide a comprehensive summary of the CBCI implementation, including various considerations such as risk-sharing mechanisms, premium determination, and policy frameworks. This research offers a fresh perspective on CBCI as a sustainable approach to catastrophe risk mitigation, contributing valuable insights to policymakers, practitioners, and researchers interested in community resilience and disaster risk management. [ABSTRACT FROM AUTHOR]

This paper uses the survey data of "Earthquake disaster insurance literacy of Chinese residents" to construct the earthquake disaster insurance literacy index system, and analyzes the mechanism of the influence of earthquake disaster insurance literacy level on residents' earthquake insurance purchasing behavior from the perspective of risk preference. Empirical study shows that the earthquake disaster insurance literacy level of residents can significantly promote their earth-quake insurance purchasing behavior. Further analysis reveals that within the impact of earth-quake disaster insurance literacy on earthquake insurance purchasing behavior, the risk preference of financial investment products plays a positive intermediary role, but the mediating effect is not as large as the direct effect. Therefore, as a critical influencing factor of earthquake insurance purchasing behavior, it becomes crucial and urgent to improve earthquake disaster insurance literacy. We will improve residents' earthquake disaster insurance literacy through multiple channels, focusing on the mediating effect of risk preference. This also provides certain policy references for government authorities and insurance institutions to formulate relevant policies and effectively promote earthquake insurance products. [ABSTRACT FROM AUTHOR]

Many regions in the United States will experience a hotter, drier climate in the coming decades. This prediction is especially troubling for rural communities whose economies depend primarily on agricultural production systems susceptible to drought. The impact of drought on the agricultural sector has knock-on effects on other industries comprising a community's economy. The result is that the total combined losses caused by drought (direct + indirect losses) can exceed direct losses alone. This study quantified the direct and indirect economic losses experienced by five counties in southwestern Oklahoma that experienced exceptional drought at some point from 2000 to 2021. The study also examines how Federal Crop Insurance Program (FCIP) indemnities for corn, cotton, and wheat mitigate the impacts of drought across all economic sectors. Drought caused an average loss of $163 million in output, 1,084 jobs, and $67 million in value-added per drought year in the communities analyzed. However, FCIP crop indemnities reduced drought-caused losses by 54% to 63%. A bumper wheat crop and record-high cattle prices caused by a reduction in supply during drought years also curbed drought-induced losses. These findings suggest that the economies of agricultural communities with more diverse production activities and higher enrollment rates in crop insurance were most resilient to drought. [ABSTRACT FROM AUTHOR]

Improving Disaster Preparedness Through Mutual Catastrophe Insurance In "A Mutual Catastrophe Insurance Framework for Horizontal Collaboration in Prepositioning Strategic Reserves," H. Zbib, B. Balcik, M.-È. Rancourt, and G. Laporte present an innovative approach to collaborative disaster preparedness. The novel framework considers a risk-averse mutual insurer offering multiyear insurance contracts with coverage deductibles and limits to a portfolio of risk-averse policyholders. It is designed to foster horizontal collaboration among policyholders for joint disaster preparedness by effectively integrating operational and financial functions. The problem is modeled as a large-scale nonlinear multistage stochastic program and solved by using an effective Benders decomposition algorithm. The framework is validated with real data from 18 Caribbean countries focusing on hurricane preparedness. Given the predicted impacts of climate change, the proposed multiyear mutual catastrophe insurance framework promises to reshape global disaster preparedness and make a profound societal impact by providing a transparent disaster financing plan to protect vulnerable regions. The study's findings stress the importance of long-term cooperation, prenegotiation of indemnification policies, and strategic setting of deductibles and limits by taking into account the correlation between policyholders. We develop a mutual catastrophe insurance framework for the prepositioning of strategic reserves to foster horizontal collaboration in preparedness against low-probability high-impact natural disasters. The framework consists of a risk-averse insurer pooling the risks of a portfolio of risk-averse policyholders. It encompasses the operational functions of planning the prepositioning network in preparedness for incoming insurance claims, in the form of units of strategic reserves, setting coverage deductibles and limits of policyholders, and providing insurance coverage to the claims in the emergency response phase. It also encompasses the financial functions of ensuring the insurer's solvency by efficiently managing its capital and allocating yearly premiums among policyholders. We model the framework as a very large-scale nonlinear multistage stochastic program, and solve it through a Benders decomposition algorithm. We study the case of Caribbean countries establishing a horizontal collaboration for hurricane preparedness. Our results show that the collaboration is more effective when established over a longer planning horizon, and is more beneficial when outsourcing becomes expensive. Moreover, the correlation of policyholders affected simultaneously under the extreme realizations and the position of their claims in their global claims distribution directly affects which policyholders get deductibles and limits. This underlines the importance of prenegotiating policyholders' indemnification policies at the onset of collaboration. Funding: G. Laporte and M.-È. Rancourt were funded by the Canadian Natural Sciences and Engineering Research Council (NSERC) [Grants 2015-06189 and 2022-04846]. Funding was also provided by the Institute for Data Valorisation (IVADO) and the Canada Research Chair in Humanitarian Supply Chain Analytics. B. Balcik was partially supported by a grant from the Scientific and Technological Research Council of Turkey (TUBITAK) 2219 program. This support is gratefully acknowledged. Supplemental Material: The online appendix is available at https://doi.org/10.1287/opre.2021.0141. [ABSTRACT FROM AUTHOR]

This paper derives finite sample results to assess the consistency of Generalized Pareto regression trees introduced by Farkas et al. (Insur. Math. Econ. 98:92–105, 2021) as tools to perform extreme value regression for heavy-tailed distributions. This procedure allows the constitution of classes of observations with similar tail behaviors depending on the value of the covariates, based on a recursive partition of the sample and simple model selection rules. The results we provide are obtained from concentration inequalities, and are valid for a finite sample size. A misspecification bias that arises from the use of a "Peaks over Threshold" approach is also taken into account. Moreover, the derived properties legitimate the pruning strategies, that is the model selection rules, used to select a proper tree that achieves a compromise between simplicity and goodness-of-fit. The methodology is illustrated through a simulation study, and a real data application in insurance for natural disasters. [ABSTRACT FROM AUTHOR]

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]

Yogyakarta, an Indonesian province prone to earthquakes, frequently suffers extensive damage to buildings, necessitating insurance coverage to mitigate potential losses. This study aims to forecast earthquake insurance premiums by predicting building damage levels resulting from earthquakes. Utilizing data from buildings affected by the June 30, 2023, earthquake in Yogyakarta, we employ K-Medoids Clustering and Support Vector Machine (SVM) to predict two categories of building damage: minor (labelled as 1) and heavy (labelled as 2). The total premiums for minor damage range from approximately USD 86.55 to USD 288.50, while for heavy damage, they range from USD 120.05 to USD 400.18 using the K-Medoids algorithm. Meanwhile, premiums for minor damage range from USD 83.14 to USD 277.13, and for heavy damage, they range from USD 223.67 to USD 745.55 using the SVM algorithm. [ABSTRACT FROM AUTHOR]

The frequency and economic damage of natural disasters have increased globally over the last two decades due to climate change. This increase has an impact on the disaster insurance field, particularly in the calculation of premiums. Many regions have a shortcoming in employing insurance because the premium is too high compared with their budget allocation. As one of the solutions, the premium calculation can be developed by applying the cross-subsidies mechanism based on economic growth. Therefore, this research aims to develop premium models of natural disaster insurance that uniquely involve two new variables of an insured region: cross-subsidies and the economic growth rate. Another novelty is the development of the Black–Scholes model, considering the two new variables, and it is used to formulate the premium model. Following the modeling process, this study uses the model to estimate the premiums for natural disaster insurance in each province of Indonesia. The estimation results show that all new variables involved in the model novelties significantly affect the premiums. This research can be used by insurance companies to determine the premium of natural disaster insurance, which involves cross-subsidies and economic growth. [ABSTRACT FROM AUTHOR]

Copyright of Journal of Natural Hazards & Environment (JNHE) / Doğal Afetler ve Çevre Dergisi (DACD) is the property of Artvin Coruh University and its content may not be copied or emailed to multiple sites or posted to a listserv without the copyright holder's express written permission. However, users may print, download, or email articles for individual use. This abstract may be abridged. No warranty is given about the accuracy of the copy. Users should refer to the original published version of the material for the full abstract. (Copyright applies to all Abstracts.)

Copyright of Zeitschrift für die gesamte Versicherungswissenschaft is the property of Springer Nature and its content may not be copied or emailed to multiple sites or posted to a listserv without the copyright holder's express written permission. However, users may print, download, or email articles for individual use. This abstract may be abridged. No warranty is given about the accuracy of the copy. Users should refer to the original published version of the material for the full abstract. (Copyright applies to all Abstracts.)

This paper examines the causal impact of natural disasters on property insurance take-up of firms. Using the data of industrial firms in China, we find that a one-standard-deviation increase in typhoon damage leads to a 2.6% increase in the purchase of property insurance the following year. This increase gradually declines and returns to the previous level three years later. Our results demonstrate that this impact is driven not by changes in risk preferences or supply-side variation but by the updated risk beliefs learned from the typhoon experience. Unlike household insurance decisions, the learning effect of firms demonstrates an indirect but positive effect of typhoons on the firm's insurance decisions from its related firms in the upstream or downstream sectors, but not from competitors. [ABSTRACT FROM AUTHOR]

Insurance against disasters plays a critical role in community recovery by providing policyholders with reliable and timely payments for repairing or reconstructing damaged houses. By allowing homeowners to transfer risk, insurance enables homeowners to address house without experiencing significant financial burdens. Although historical events have highlighted the importance of insurance, its quantitative impact on community recovery, particularly in tornado-impacted communities, is understudied. This study focuses on advancing our understanding of whether sufficiently insured houses can have a positive impact on the recovery of tornado-impacted communities (i.e., the main research question). This paper proposes a two-stage simulation framework to quantitatively evaluate the effects of insurance on community recovery. In the first stage of the framework, we developed statistical models to estimate homeowners' insurance decisions prior to a tornado event. In the second stage, we examined the effects of insurance on various aspects of community recovery. To develop empirical and statistical models regarding insurance decisions and their impacts on housing recovery, we collected data through online surveys targeting residents whose properties were damaged by the tornadoes that occurred in May 2019 in the United States. Finally, the proposed simulation framework was applied to the City of Dayton, Ohio following those May 2019 tornado events to address the main research question. The results of the simulation concluded that sufficiently insured houses can have a positive impact on community recovery and highlighted the need for effective policies and economic incentives to encourage individuals to purchase insurance. [ABSTRACT FROM AUTHOR]

Recurrence statistics of large earthquakes has a long-term economic and societal importance. This study investigates the temporal distribution of large (M ≥ 6) earthquakes in the Nepal Himalaya. We compile earthquake data of more than 200 years (1800–2022) and calculate interevent times of successive main shocks. We then derive recurrence-time statistics of large earthquakes using a set of twelve reference statistical distributions. These distributions include the time-independent exponential and time-dependent gamma, lognormal, Weibull, Levy, Maxwell, Pareto, Rayleigh, inverse Gaussian, inverse Weibull, exponentiated exponential and exponentiated Rayleigh. Based on a sample of 38 interoccurrence times, we estimate model parameters via the maximum likelihood estimation and provide their respective confidence bounds through Fisher information and Cramer–Rao bound. Using three model selection approaches, namely the Akaike information criterion (AIC), Kolmogorov–Smirnov goodness-of-fit test and the Chi-square test, we rank the performance of the applied distributions. Our analysis reveals that (i) the best fit comes from the exponentiated Rayleigh (rank 1), exponentiated exponential (rank 2), Weibull (rank 3), exponential (rank 4) and the gamma distribution (rank 5), (ii) an intermediate fit comes from the lognormal (rank 6) and the inverse Weibull distribution (rank 7), whereas (iii) the distributions, namely Maxwell (rank 8), Rayleigh (rank 9), Pareto (rank 10), Levy (rank 11) and inverse Gaussian (rank 12), show poor fit to the observed interevent times. Using the best performed exponentiated Rayleigh model, we observe that the estimated cumulative and conditional occurrence of a M ≥ 6 event in the Nepal Himalaya reach 0.90–0.95 by 2028–2031 and 2034–2037, respectively. We finally present a number of conditional probability curves (hazard function curves) to examine future earthquake hazard in the study region. Overall, the findings provide an important basis for a variety of practical applications, including infrastructure planning, disaster insurance and probabilistic seismic hazard analysis in the Nepal Himalaya. [ABSTRACT FROM AUTHOR]

We study the role of insurance in improving household and community disaster recovery. Our analysis harnesses both a unique survey of residents impacted by four land‐falling hurricanes in the United States and foot traffic data on visits to local businesses. Households sort into two groups when it comes to financing recovery: those primarily using property insurance and those largely uninsured, instead relying more on friends and family. Insurance improves households' ability to participate in the local economy. Postflood visitation rates to many local businesses increase with greater flood insurance take‐up rates. Expanded participation in the local economy is consistent with insurance reducing financial constraints; indeed, insured households are less likely to report experiencing high financial burdens in both the short and longer‐run postdisaster and are less likely to have unmet funding needs. Despite this, motivating the purchase of disaster insurance remains challenging, particularly among low‐income households who perceive insurance as less useful. [ABSTRACT FROM AUTHOR]

The COVID-19 pandemic created an environment of unprecedented shock among global economies. Prolonged lockdown across countries, national economic down-turns and unexpected disruptions of demand and supply cycles created a likeliness towards a phase of slowdown that could last for an uncertain period. The current study is an attempt to investigate the possible post-pandemic implications on selected financial dimensions of an economy. Secondary data have been relied on to highlight the social and economic impact of this pandemic by drawing insights from literature that have been able to foretell or assess the impacts of likely situations of crisis. Major findings of the study are indicative towards the need of fulfilling unmet investments in preparedness against pandemics, the obvious advantages of having pandemics like COVID-19 being covered by insurance, possible long-term shifts in global spending patterns and the importance of financial markets enduring through such uncertainty. Understanding the impacts of past events that might closely parallel the COVID-19 pandemic brings out avenues of future research in this direction and a possibility of supplementing the scant literature available in this area of study. [ABSTRACT FROM AUTHOR]

Starting from the context of the risks arising from individual losses that natural disasters may cause, the fear that these risks may cause, and the desire for compensation systems (natural disaster insurance) that this fear may cause, the aim of this research is to examine the risks that may be caused by a possible high-risk disaster through a natural disaster exercise and to investigate the relationship between possible fear and taking out natural disaster insurance. The main population of the research is 2162 tradesmen operating in Bayburt province. Convenience sampling method, one of the non-random sampling methods, was used in the research. A total of 764 people from this population were included in the study. The research was conducted in Bayburt center and two districts between 02/02/2023 and 02/06/2023 using the survey method. While preparing the research survey, the sources specified in the theoretical framework were generally used, and the survey included demographic information, questions about drills, insurance and individuals' feelings about disaster. As a result of the research, the subjects are highly afraid of disasters, do not experience fear during disaster drills, and only half of the subjects are willing to take out disaster insurance after the drill. In addition, the feeling of fear felt during the disaster is not a factor that determines the desire to have disaster insurance after the disaster. [ABSTRACT FROM AUTHOR]

Conventional earthquake risk modeling involves several notable simplifications, which neglect: (1) the effects on seismicity of interactions between adjacent faults and the long-term elastic rebound behavior of faults; (2) short-term hazard increases associated with aftershocks; and (3) the accumulation of damage in assets due to the occurrence of multiple earthquakes in a short time window, without repairs. Several recent earthquake events (e.g. 2010–2011 Canterbury earthquakes, New Zealand; 2019 Ridgecrest earthquakes, USA; and 2023 Turkey–Syria earthquakes) have emphasized the need for risk models to account for the aforementioned short- and long-term time-dependent characteristics of earthquake risk. This study specifically investigates the sensitivity of monetary loss (i.e. a possible earthquake-risk-model output) to these time dependencies, for a case-study portfolio in Central Italy. The investigation is intended to provide important insights for the catastrophe risk insurance and reinsurance industry. In addition to salient catastrophe risk insurance features, the end-to-end approach for time-dependent earthquake risk modeling used in this study incorporates recent updates in long-term time-dependent fault modeling, aftershock forecasting, and vulnerability modeling that accounts for damage accumulation. The sensitivity analysis approach presented may provide valuable guidance on the importance and appropriate treatment of time dependencies in regional (i.e. portfolio) earthquake risk models. We find that the long-term fault and aftershock occurrence models are the most crucial features of a time-dependent seismic risk model to constrain, at least for the monetary loss metrics examined in this study. Accounting for damage accumulation is also found to be important, if there is a high insurance deductible associated with portfolio assets. [ABSTRACT FROM AUTHOR]

The devastating consequences of tsunamis on coastal infrastructure have highlighted the urgent need for effective disaster risk reduction strategies. To mitigate tsunami disasters, the insurance industry plays a vital role in implementing risk transfer measures by providing financial protection against asset damage. However, the current research on catastrophe insurance policies for coastal infrastructure lacks consideration of climate change effects. It is essential to take into account the non-stationary effects of sea-level rise to develop long-term tsunami disaster mitigation measures and promote socioeconomic resilience in coastal communities. This paper aims to provide an insurance portfolio optimization framework for coastal residential buildings subjected to tsunamis considering non-stationary sea-level rise effects based on a stochastic simulation approach. A spatiotemporal probabilistic sea-level rise hazard assessment is carried out by utilizing available climate models and considering several emission scenarios. Tsunami propagation analyses under various sea-level rise cases are performed to evaluate the time-variant tsunami hazard curves based on Monte Carlo simulation. A life cycle-based stochastic insurance claim model associated with the cumulative loss of building assets is developed based on a non-stationary compound renewal process. Finally, a sample average approximation method is leveraged to estimate the optimum basic insurance premium rate by maximizing the insurer's profit under a cost-constrained insurance purchase decision of homeowners. As a case study, the proposed framework is applied to multiple municipalities situated in the tsunami-prone region of Kochi Prefecture, Japan. Sea-level rise substantially decreases the maximum profits of tsunami insurers and increases the premium rate and ruin probability. [ABSTRACT FROM AUTHOR]

In this paper, we draw insights from a 15-year qualitative research program exploring catastrophe insurance and gaps in insurance protection as risks escalate within a world impacted by a climate emergency. We suggest that the ebb-and-flow of our research team's composition and activities through time was inextricably linked with our ability to have a sustained impact on such a large-scale societal issue. The essay situates itself within the research impact and team literature, narrates the trajectory of our research program and team development, and develops a framework for effectively managing impact-oriented qualitative research teams over time. Our framework illustrates key aspects of this process including team (re)forming, building team and individual stickability, performing, and managing team flux. We also present 10 practical takeaways for how these aspects can be managed effectively to produce long-term impact work to address grand challenges. [ABSTRACT FROM AUTHOR]

This study explores how the System Dynamics modeling approach can help deal with the problem of conventional insurance mechanisms by studying the feedback loops governing complex systems connected to the disaster insurance mechanism. Instead of addressing the disaster's underlying risk, the traditional disaster insurance strategy largely focuses on providing financial security for asset recovery after a disaster. This constraint becomes especially concerning as the threat of climate-related disasters grows since it may result in rising long-term damage expenditures. A new insurance mechanism is suggested as a solution to this problem to lower damage costs while safeguarding insured assets and luring new assets to be protected. A local case study utilizing a System Dynamics stock and flow model is created and validated by examining the model's structure, sensitivity analysis, and extreme value test. The results of the case study performed on a city in Latvia highlight the significance of effective disaster risk reduction strategies applied within the innovative insurance mechanism in lowering overall disaster costs. The logical coherence seen throughout the analysis of simulated scenario results strengthens the established model's plausibility. The case study's findings support the innovative insurance mechanism's dynamic hypothesis and show the main influencing factors on the dynamics within the proposed innovative insurance mechanism. The information this study can help insurance firms, policy planners, and disaster risk managers make decisions that will benefit local communities and other stakeholders regarding climate-related disaster risk mitigation. [ABSTRACT FROM AUTHOR]

Over the second half of the twentieth century, the moral economy of insurance has shifted from solidarity and mutual support to individual responsibility. In this context, the French regime for the protection against natural catastrophes that took shape in the 1980s exemplifies a strong and almost anachronical political will to foster solidarity at the national level, thus questioning the moral economy of responsibility. This paper offers a textual analysis of the official debates that led to the launch of the regime. It shows how the representatives chose to separate compensation, financed by equal individual participation, from state prevention. This contrasts with other schemes worldwide that rely on rational decision theory to situate the responsibility for prevention at the individual level. In this alternative, risk-based premiums play a theoretically crucial role in risk signals. In practice, however, they lead to affordability issues while failing to govern prevention as theoretically expected. With the climate crisis exacerbating this phenomenon, the examination of the French regime thus allows to fruitfully revive other moral economies of insurance. [ABSTRACT FROM AUTHOR]

Deposit insurance involves catastrophe risk because bank failures spike during a banking crisis. Although mutual insurance is ill-suited for catastrophe risk, the US government structures deposit insurance like a mutual company owned by policyholders. Furthermore, an intertemporal mispricing resulting from a dividend-surcharge arrangement produces several problems. Most importantly, it worsens moral hazard. Through dividends and surcharges, deposit insurance transfers the premium burden from highrisk banks to low-risk banks and in effect erodes the charter value of low-risk banks. In addition, high-risk banks taking catastrophe risk can outperform low-risk banks for many years in a row, putting pressures on managers of low-risk banks. Owing to these factors, an underpricing of catastrophe risk before its realization can ratchet up risk-taking by banks. Other problems with the intertemporal mispricing include making the banking business more procyclical, distorting the prices of banking products, and exposing taxpayers to asymmetric downside risk. To ensure fair competition and improve economic efficiency, the government should set the insurance premium based not on the realized loss but on the expected loss. [ABSTRACT FROM AUTHOR]

While flooding is the costliest natural disaster risk, public‐sector investments provide incomplete protection. Moreover, individuals are in general reluctant to voluntarily invest in measures which limit damage costs from natural disasters. The moral hazard hypothesis argues that insured individuals take fewer other preparedness measures based on their assumption that their losses will be covered anyway. Conversely, the advantageous selection hypothesis argues that individuals view insurance and other risk reduction measures as complements. This study offers a comprehensive assessment of factors related to the separate uptake of natural disaster insurance and the flood‐proofing of homes as well as why people may take both of these measures together. We use data from a survey conducted in Paris, France, in 2018, after several flood events, for a representative sample of 2976 residents facing different levels of flood risk. We perform both main effects regressions and interaction analyses to reveal that home adaptation to flooding is positively associated with comprehensive insurance coverage, which includes financial protection against natural disasters. Furthermore, actual and perceived risks, as well as awareness of official information on flood risk, are found to explain some of the relationship between home adaptation and comprehensive insurance purchase. We suggest several recommendations to policymakers based on these insights which aim to address insurance coverage gaps and the failure to take disaster risk reduction measures. In particular, groups in socially vulnerable situations may benefit from subsidized insurance, low interest loans, and decision aids to implement costly adaptation measures. [ABSTRACT FROM AUTHOR]

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Objectives Disaster preparedness plays a vital role in mitigating risks and strengthening resilience of local communities in rural areas. This study examines the linkage between psychological factors and 4 kinds of disaster preparedness intentions and explores the challenges in translating intentions into actions. Methods This study utilized survey data from 325 households in Chongqing, China, that are threatened by geological disasters. We conducted empirical analysis using a regression model and carried out several robustness tests. The independent variables, psychological factors, are divided into risk appraisal, coping appraisal, and stakeholder appraisal. The dependent variable, disaster preparedness intentions, includes evacuation, disaster insurance, emergency supplies storage, and behaving eco-friendly. Results Multiple psychological factors have significant influence on disaster preparedness intentions, with varying impacts on different preparedness aspects. Social barriers—lack of capital, access, and triggers—hinder translating preparedness intentions into actions. Conclusions Our study integrates protection motivation theory and protective action decision model to understand psychological factors influencing disaster preparedness in rural China. We identify key factors significantly impact preparedness intentions and uncover barriers hindering the translation of intentions into actions. The findings underscore the importance of integrated approaches that bridge the gap between psychological awareness and the availability of resources, ultimately fostering a more resilient society in the face of disasters. [ABSTRACT FROM AUTHOR]

This paper critically assesses debt as a response to ecological, fiscal, and climate disasters that have emerged within the 'blue economy' agenda in the Caribbean. Caribbean countries routinely suffer major losses of life, internal social and economic displacement, increased debt burdens, and significant economic damages due to hurricanes and ecological disasters in the context of an ongoing fiscal crisis. In response, regional public and national agencies have proposed 'blue economy' initiatives to address the regional need for finance, to rejuvenate financial flows, and to compensate for extremely constrained fiscal resources and externally imposed austerity (or debt bondage). Major recent hurricanes and ecological shocks illustrate uneven and interconnected spatial histories of anti‐Black dispossession, disenfranchisement, and deprivation, offering important empirical terrain from which to appreciate how contemporary 'disasters' have become new means to extend hierarchical plantation formations to the seascape through debt‐driven finance and austerity. The paper demonstrates the ways in which coercive financial instruments like catastrophe insurance, debt swaps, 'blue bonds', and traditional public debt constitute tools to further integrate these societies differentially into racialised financial geographies and entrench a coloniality of being. As traditional plantation structures become exhausted and lack capacity to effectively ensure growth, these innovative finance mechanisms are required for 'blue' accumulation. We situate spiralling debt burdens and these new instruments spurred by socially produced and postcolonial disasters within postplantation ecologies that describe socio‐political relations and spatial dependencies linked to interwoven logics of disaster‐based financial capitalism that seek to extend the extractive capacity of the plantation anew. These arrangements tend to naturalise and render disaster, death, and debt as ordinary events and obligations arising from postcolonial statehood, and take for granted their origins in racialised plantation structures. Climate and fiscal crises currently characterise the Caribbean and place major pressure on the region's limited sovereignties. To address these problems, Caribbean actors have proposed a number financialised products, such as 'blue bonds', catastrophe insurance, and debt‐for‐nature swaps and associated governance arrangements, to develop the blue economy. These configurations and relations deepen what I call the post‐plantation ecology, by intensifying extraction commodification, and exploitation of racialized labour towards 'blue' accumulation within the context of conditional sovereignty. [ABSTRACT FROM AUTHOR]

With the intensification of human activities, rapid economic and social development, the continuous accumulation and increase of social wealth, the phenomenon and impact of natural disasters have become more and more complex, the academic attention and research on the issue of disaster economy have been deepening. The theoretical research results and development dynamics of disaster economy in foreign countries are sorted out. It is started from the impact of disasters on the economy, and the overall evaluation, long-term and short-term impacts and regional differences are given. Then the disaster risk identification and pre-disaster risk defense are addressed from the perspectives of disaster risk assessment, the role of enterprises, families and communities, and disaster insurance. Lastly, the assessment of disaster losses and post-disaster economic recovery are discussed. It summarizes the cutting-edge achievements and characteristics of foreign research on disaster economy, which has essential inspiration and references for current development of disaster economic theory and practical application in China. [ABSTRACT FROM AUTHOR]

Collaboration in the prevention and control of water resource disasters is an important part of the prevention and cooperation of international river conflicts. It is also an important means to promote the de-securitization of water resources. Taking the Ili River and Lancang-Mekong River, two typical transboundary rivers in China, as the objects of analysis, this paper identifies the deficiencies in disaster early warning and emergency management of transboundary rivers in China from the perspectives of breadth, depth, and closeness. The main existing problems are summarized as follows: (J) There is no mature collaborative management mechanism for water resource disasters within the basin with an integrated platform to share data, predict disasters, formulate strategies, and communicate information. © Due to the lack of an efficient two-way disclosure system, there is little information sharing among the basin countries. © Special funds for water resource cooperation in the basin are far from enough, and they are characterized as scattered, small in amount, and intermittent. Accordingly, this paper proposes four principles for collaborative management over transboundary river disasters: information sharing, equal consultation, no significant harm, and integrated planning. Furthermore, a mechanism for disaster early warning and emergency cooperative management over transboundary rivers is proposed, including a special fund for basin water resource cooperation, an information sharing system, a disaster risk assessment system, and an emergency management decision system. Safeguard measures to support the operation of the management mechanism are put forward, including joint construction of water conservancy projects, technical assistance, interest compensation, legal system construction, fund establishment, disaster insurance, and so on. The mechanism proposed in this paper can not only make up for the deficiencies of the existing management mechanism framework of transboundary rivers in China, but also provide a reference for the implementation of disaster early warning and emergency management of other transboundary rivers. [ABSTRACT FROM AUTHOR]

Planning for community resilience through public infrastructure projects often engenders problems associated with social dilemmas, but little work has been done to understand how individuals respond when presented with opportunities to invest in such developments. Using statistical learning techniques trained on the results of a web‐based common pool resource game, we analyze participants' decisions to invest in hypothetical public infrastructure projects that bolster their community's resilience to disasters. Given participants' dispositions and in‐game circumstances, Bayesian additive regression tree (BART) models are able to accurately predict deviations from players' decisions that would reasonably lead to Pareto‐efficient outcomes for their communities. Participants tend to overcontribute relative to these Pareto‐efficient strategies, indicating general risk aversion that is analogous to individuals purchasing disaster insurance even though it exceeds expected actuarial costs. However, higher trait Openness scores reflect an individual's tendency to follow a risk‐neutral strategy, and fewer available resources predict lower perceived utilities derived from the infrastructure developments. In addition, several input variables have nonlinear effects on decisions, suggesting that it may be warranted to use more sophisticated statistical learning methods to reexamine results from previous studies that assume linear relationships between individuals' dispositions and responses in applications of game theory or decision theory. [ABSTRACT FROM AUTHOR]

Earthquakes pose potentially substantial risks to residents in the Western Quebec seismic zone of eastern Canada, where Ottawa and Montreal are located. In eastern Canada, the majority of houses are not constructed to modern seismic standards and most homeowners do not purchase earthquake insurance for their homes. If a devastating earthquake strikes, homeowners would be left unprotected financially. To quantify financial risks to homeowners in the Western Quebec seismic zone, regional earthquake catastrophe models are developed by incorporating up-to-date public information on hazard, exposure and vulnerability. The developed catastrophe models can quantify the expected and upper-tail financial seismic risks by considering a comprehensive list of possible seismic events as well as critical earthquake scenarios based on the latest geological data in the region. The results indicate that regional seismic losses could reach several tens of billions of dollars if a moderate-to-large earthquake occurs near urban centres in the region, such as Montreal and Ottawa. The regional seismic loss estimates produced in this study are useful for informing earthquake risk management strategies, including earthquake insurance and disaster relief policies. [ABSTRACT FROM AUTHOR]

Copyright of Journal of Academic Social Science Studies is the property of Journal of Academic Social Science Studies and its content may not be copied or emailed to multiple sites or posted to a listserv without the copyright holder's express written permission. However, users may print, download, or email articles for individual use. This abstract may be abridged. No warranty is given about the accuracy of the copy. Users should refer to the original published version of the material for the full abstract. (Copyright applies to all Abstracts.)