@article{TesselaarBotzenHaeretal.2020, author = {Tesselaar, Max and Botzen, W. J. Wouter and Haer, Toon and Hudson, Paul and Tiggeloven, Timothy and Aerts, Jeroen C. J. H.}, title = {Regional inequalities in flood insurance affordability and uptake under climate change}, series = {Sustainability}, volume = {12}, journal = {Sustainability}, number = {20}, publisher = {MDPI}, address = {Basel}, issn = {2071-1050}, doi = {10.3390/su12208734}, pages = {30}, year = {2020}, abstract = {Flood insurance coverage can enhance financial resilience of households to changing flood risk caused by climate change. However, income inequalities imply that not all households can afford flood insurance. The uptake of flood insurance in voluntary markets may decline when flood risk increases as a result of climate change. This increase in flood risk may cause substantially higher risk-based insurance premiums, reduce the willingness to purchase flood insurance, and worsen problems with the unaffordability of coverage for low-income households. A socio-economic tipping-point can occur when the functioning of a formal flood insurance system is hampered by diminishing demand for coverage. In this study, we examine whether such a tipping-point can occur in Europe for current flood insurance systems under different trends in future flood risk caused by climate and socio-economic change. This analysis gives insights into regional inequalities concerning the ability to continue to use flood insurance as an instrument to adapt to changing flood risk. For this study, we adapt the "Dynamic Integrated Flood and Insurance" (DIFI) model by integrating new flood risk simulations in the model that enable examining impacts from various scenarios of climate and socio-economic change on flood insurance premiums and consumer demand. Our results show rising unaffordability and declining demand for flood insurance across scenarios towards 2080. Under a high climate change scenario, simulations show the occurrence of a socio-economic tipping-point in several regions, where insurance uptake almost disappears. A tipping-point and related inequalities in the ability to use flood insurance as an adaptation instrument can be mitigated by introducing reforms of flood insurance arrangements.}, language = {en} } @article{HudsonBotzenAerts2019, author = {Hudson, Paul and Botzen, W. J. Wouter and Aerts, Jeroen C. J. H.}, title = {Flood insurance arrangements in the European Union for future flood risk under climate and socioeconomic change}, series = {Global environmental change : human and policy dimensions}, volume = {58}, journal = {Global environmental change : human and policy dimensions}, publisher = {Elsevier}, address = {Oxford}, issn = {0959-3780}, doi = {10.1016/j.gloenvcha.2019.101966}, pages = {13}, year = {2019}, abstract = {Flood risk will increase in many areas around the world due to climate change and increase in economic exposure. This implies that adequate flood insurance schemes are needed to adapt to increasing flood risk and to minimise welfare losses for households in flood-prone areas. Flood insurance markets may need reform to offer sufficient and affordable financial protection and incentives for risk reduction. Here, we present the results of a study that aims to evaluate the ability of flood insurance arrangements in Europe to cope with trends in flood risk, using criteria that encompass common elements of the policy debate on flood insurance reform. We show that the average risk-based flood insurance premium could double between 2015 and 2055 in the absence of more risk reduction by households exposed to flooding. We show that part of the expected future increase in flood risk could be limited by flood insurance mechanisms that better incentivise risk reduction by policyholders, which lowers vulnerability. The affordability of flood insurance can be improved by introducing the key features of public-private partnerships (PPPs), which include public reinsurance, limited premium cross-subsidisation between low- and high-risk households, and incentives for policyholder-level risk reduction. These findings were evaluated in a comprehensive sensitivity analysis and support ongoing reforms in Europe and abroad that move towards risk-based premiums and link insurance with risk reduction, strengthen purchase requirements, and engage in multi-stakeholder partnerships.}, language = {en} } @misc{HudsonBotzen2019, author = {Hudson, Paul and Botzen, W. J. Wouter}, title = {Cost-benefit analysis of flood-zoning policies: A review of current practice}, series = {Wiley Interdisciplinary Reviews : Water}, volume = {6}, journal = {Wiley Interdisciplinary Reviews : Water}, number = {6}, publisher = {Wiley}, address = {Hoboken}, issn = {2049-1948}, doi = {10.1002/wat2.1387}, pages = {21}, year = {2019}, abstract = {One commonly proposed method to limit flood risk is land-use or zoning policies which regulates construction in high-risk areas, in order to reduce economic exposure and its vulnerability to flood events. Although such zoning regulations can be effective in limiting trends in flood risk, they also have adverse impacts on society, for instance by limiting local development of areas near the water. In order to judge whether proposed land-use or zoning policies are a net benefit to society, they should be accepted or rejected based on a societal cost-benefit analysis (CBA). However, conducting a CBA of zoning regulation is complex and comprehensive guidelines of how to do such an analysis are lacking. We offer guidelines for good practice. In order to assess the costs and benefits of zoning as a climate change adaption strategy, they should be assessed at a societal level in order to account for public good features of flood risk reduction strategies, and because costs in one area can be benefits in another region. We propose a multistep process: first, determine the spatial extent of the zoning policy and how interconnected the zoned area is to other locations; second, conduct a CBA using monetary costs and benefits estimated from an integrated hydro-economic model to investigate if total benefits exceed total costs; third, conduct a sensitivity analysis regarding the main assumptions; fourth, conduct a multicriteria analysis (MCA) of the normative outcomes of a zoning policy. A desirable policy is preferred in both the CBA and MCA. This article is categorized under: Engineering Water > Planning Water Human Water > Value of Water Science of Water > Water Extremes Human Water > Methods}, language = {en} } @misc{HudsonDeRuigDeRuiteretal.2019, author = {Hudson, Paul and De Ruig, Lars T. and De Ruiter, Marco C. and Kuik, Onno J. and Botzen, W. J. Wouter and Le Den, X. and Persson, Magnus and Benoist, Anthony and Nielsen, C. N.}, title = {An assessment of best practices of extreme weather insurance and directions for a more resilient society}, series = {Postprints der Universit{\"a}t Potsdam Mathematisch-Naturwissenschaftliche Reihe}, journal = {Postprints der Universit{\"a}t Potsdam Mathematisch-Naturwissenschaftliche Reihe}, number = {757}, issn = {1866-8372}, doi = {10.25932/publishup-43351}, url = {http://nbn-resolving.de/urn:nbn:de:kobv:517-opus4-433510}, pages = {22}, year = {2019}, abstract = {Extreme weather resilience has been defined as being based on three pillars: resistance (the ability to lower impacts), recovery (the ability to bounce back), and adaptive capacity (the ability to learn and improve). These resilience pillars are important both before and after the occurrence of extreme weather events. Extreme weather insurance can influence these pillars of resilience depending on how particular insurance mechanisms are structured. We explore how the lessons learnt from the current best insurance practices can improve resilience to extreme weather events. We employ an extensive inventory of private property and agricultural crop insurance mechanisms to conduct a multi-criteria analysis of insurance market outcomes. We draw conclusions regarding the patterns in the best practice from six European countries to increase resilience. We suggest that requirements to buy a bundle extreme weather event insurance with general insurance packages are strengthened and supported with structures to financing losses through public-private partnerships. Moreover, support for low income households through income vouchers could be provided. Similarly, for the agricultural sector we propose moving towards comprehensive crop yield insurance linked to general agricultural subsidies. In both cases a nationally representative body can coordinate the various stakeholders into acting in concert.}, language = {en} } @misc{HudsonBotzenPoussinetal.2019, author = {Hudson, Paul and Botzen, W. J. Wouter and Poussin, Jennifer and Aerts, Jeroen C. J. H.}, title = {Impacts of flooding and flood preparedness on subjective well-being}, series = {Journal of Happiness Studies}, volume = {20}, journal = {Journal of Happiness Studies}, number = {2}, publisher = {Springer Science}, address = {Dordrecht}, issn = {1389-4978}, doi = {10.1007/s10902-017-9916-4}, pages = {665 -- 682}, year = {2019}, abstract = {Flood disasters severely impact human subjective well-being (SWB). Nevertheless, few studies have examined the influence of flood events on individual well-being and how such impacts may be limited by flood protection measures. This study estimates the long term impacts on individual subjective well-being of flood experiences, individual subjective flood risk perceptions, and household flood preparedness decisions. These effects are monetised and placed in context through a comparison with impacts of other adverse events on well-being. We collected data from households in flood-prone areas in France. The results indicate that experiencing a flood has a large negative impact on subjective well-being that is incompletely attenuated over time. Moreover, individuals do not need to be directly affected by floods to suffer SWB losses since subjective well-being is lower for those who expect their flood risk to increase or who have seen a neighbour being flooded. Floodplain inhabitants who prepared for flooding by elevating their home have a higher subjective well-being. A monetisation of the aforementioned well-being impacts shows that a flood requires Euro150,000 in immediate compensation to attenuate SWB losses. The decomposition of the monetised impacts of flood experience into tangible losses and intangible effects on SWB shows that intangible effects are about twice as large as the tangible direct monetary flood losses. Investments in flood protection infrastructure may be under funded if the intangible SWB benefits of flood protection are not taken into account.}, language = {en} } @article{UnterbergerHudsonBotzenetal.2018, author = {Unterberger, Christian and Hudson, Paul and Botzen, W. J. Wouter and Schroeer, Katharina and Steininger, Karl W.}, title = {Future public sector flood risk and risk sharing arrangements}, series = {Ecological economics}, volume = {156}, journal = {Ecological economics}, publisher = {Elsevier}, address = {Amsterdam}, issn = {0921-8009}, doi = {10.1016/j.ecolecon.2018.09.019}, pages = {153 -- 163}, year = {2018}, abstract = {Climate change, along with socio-economic development, will increase the economic impacts of floods. While the factors that influence flood risk to private property have been extensively studied, the risk that natural disasters pose to public infrastructure and the resulting implications on public sector budgets, have received less attention. We address this gap by developing a two-staged model framework, which first assesses the flood risk to public infrastructure in Austria. Combining exposure and vulnerability information at the building level with inundation maps, we project an increase in riverine flood damage, which progressively burdens public budgets. Second, the risk estimates are integrated into an insurance model, which analyzes three different compensation arrangements in terms of the monetary burden they place on future governments' budgets and the respective volatility of payments. Formalized insurance compensation arrangements offer incentives for risk reduction measures, which lower the burden on public budgets by reducing the vulnerability of buildings that are exposed to flooding. They also significantly reduce the volatility of payments and thereby improve the predictability of flood damage expenditures. These features indicate that more formalized insurance arrangements are an improvement over the purely public compensation arrangement currently in place in Austria.}, language = {en} } @misc{UnterbergerHudsonBotzenetal.2018, author = {Unterberger, Christian and Hudson, Paul and Botzen, W. J. Wouter and Schroeer, Katharina and Steininger, Karl W.}, title = {Future public sector flood risk and risk sharing arrangements}, series = {Postprints der Universit{\"a}t Potsdam : Mathematisch-Naturwissenschaftliche Reihe}, journal = {Postprints der Universit{\"a}t Potsdam : Mathematisch-Naturwissenschaftliche Reihe}, number = {634}, issn = {1866-8372}, doi = {10.25932/publishup-42462}, url = {http://nbn-resolving.de/urn:nbn:de:kobv:517-opus4-424629}, pages = {11}, year = {2018}, abstract = {Climate change, along with socio-economic development, will increase the economic impacts of floods. While the factors that influence flood risk to private property have been extensively studied, the risk that natural disasters pose to public infrastructure and the resulting implications on public sector budgets, have received less attention. We address this gap by developing a two-staged model framework, which first assesses the flood risk to public infrastructure in Austria. Combining exposure and vulnerability information at the building level with inundation maps, we project an increase in riverine flood damage, which progressively burdens public budgets. Second, the risk estimates are integrated into an insurance model, which analyzes three different compensation arrangements in terms of the monetary burden they place on future governments' budgets and the respective volatility of payments. Formalized insurance compensation arrangements offer incentives for risk reduction measures, which lower the burden on public budgets by reducing the vulnerability of buildings that are exposed to flooding. They also significantly reduce the volatility of payments and thereby improve the predictability of flood damage expenditures. These features indicate that more formalized insurance arrangements are an improvement over the purely public compensation arrangement currently in place in Austria.}, language = {en} } @article{BubeckBotzenLaudanetal.2018, author = {Bubeck, Philip and Botzen, W. J. Wouter and Laudan, Jonas and Aerts, Jeroen C. J. H. and Thieken, Annegret}, title = {Insights into flood-coping appraisals of protection motivation theory}, series = {Risk analysis}, volume = {38}, journal = {Risk analysis}, number = {6}, publisher = {Wiley}, address = {Hoboken}, issn = {0272-4332}, doi = {10.1111/risa.12938}, pages = {1239 -- 1257}, year = {2018}, abstract = {Protection motivation theory (PMT) has become a popular theory to explain the risk-reducing behavior of residents against natural hazards. PMT captures the two main cognitive processes that individuals undergo when faced with a threat, namely, threat appraisal and coping appraisal. The latter describes the evaluation of possible response measures that may reduce or avert the perceived threat. Although the coping appraisal component of PMT was found to be a better predictor of protective intentions and behavior, little is known about the factors that influence individuals' coping appraisals of natural hazards. More insight into flood-coping appraisals of PMT, therefore, are needed to better understand the decision-making process of individuals and to develop effective risk communication strategies. This study presents the results of two surveys among more than 1,600 flood-prone households in Germany and France. Five hypotheses were tested using multivariate statistics regarding factors related to flood-coping appraisals, which were derived from the PMT framework, related literature, and the literature on social vulnerability. We found that socioeconomic characteristics alone are not sufficient to explain flood-coping appraisals. Particularly, observational learning from the social environment, such as friends and neighbors, is positively related to flood-coping appraisals. This suggests that social norms and networks play an important role in flood-preparedness decisions. Providing risk and coping information can also have a positive effect. Given the strong positive influence of the social environment on flood-coping appraisals, future research should investigate how risk communication can be enhanced by making use of the observed social norms and network effects.}, language = {en} } @article{AertsBotzenClarkeetal.2018, author = {Aerts, J. C. J. H. and Botzen, W. J. Wouter and Clarke, K. C. and Cutter, S. L. and Hall, J. W. and Merz, Bruno and Michel-Kerjan, E. and Mysiak, J. and Surminski, Swenja and Kunreuther, H.}, title = {Integrating human behaviour dynamics into flood disaster risk assessment}, series = {Nature climate change}, volume = {8}, journal = {Nature climate change}, number = {3}, publisher = {Nature Publ. Group}, address = {London}, issn = {1758-678X}, doi = {10.1038/s41558-018-0085-1}, pages = {193 -- 199}, year = {2018}, abstract = {The behaviour of individuals, businesses, and government entities before, during, and immediately after a disaster can dramatically affect the impact and recovery time. However, existing risk-assessment methods rarely include this critical factor. In this Perspective, we show why this is a concern, and demonstrate that although initial efforts have inevitably represented human behaviour in limited terms, innovations in flood-risk assessment that integrate societal behaviour and behavioural adaptation dynamics into such quantifications may lead to more accurate characterization of risks and improved assessment of the effectiveness of risk-management strategies and investments. Such multidisciplinary approaches can inform flood-risk management policy development.}, language = {en} } @article{BubeckKreibichPenningRowselletal.2017, author = {Bubeck, Philip and Kreibich, Heidi and Penning-Rowsell, E. C. and Botzen, W. J. Wouter and de Moel, H. and Klijn, F.}, title = {Explaining differences in flood management approaches in Europe and in the USA - a comparative analysis}, series = {Journal of flood risk management}, volume = {10}, journal = {Journal of flood risk management}, publisher = {Wiley}, address = {Hoboken}, issn = {1753-318X}, doi = {10.1111/jfr3.12151}, pages = {436 -- 445}, year = {2017}, abstract = {Flood risk management in Europe and worldwide is not static but constantly in a state of flux. There has been a trend towards more integrated flood risk management in many countries. However, the initial situation and the pace and direction of change is very different in the various countries. In this paper, we will present a conceptual framework that seeks to explain why countries opt for different flood risk management portfolios. The developed framework utilises insights from a range of policy science concepts in an integrated way and considers, among others, factors such as geographical characteristics, the experience with flood disasters, as well as human behavioural aspects.}, language = {en} }