@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}
}
@article{Hudson2018,
  author    = {Hudson, Paul},
  title     = {A comparison of definitions of affordability for flood risk adaption measures},
  series = {Mitigation and adaptation strategies for global change : an international journal devoted to scientific, engineering, socio-economic and policy responses to environmental change},
  volume    = {23},
  journal   = {Mitigation and adaptation strategies for global change : an international journal devoted to scientific, engineering, socio-economic and policy responses to environmental change},
  number    = {7},
  publisher = {Springer},
  address   = {Dordrecht},
  issn      = {1381-2386},
  doi       = {10.1007/s11027-017-9769-5},
  pages     = {1019 -- 1038},
  year      = {2018},
  abstract  = {Risk-based insurance is a commonly proposed and discussed flood risk adaptation mechanism in policy debates across the world such as in the United Kingdom and the United States of America. However, both risk-based premiums and growing risk pose increasing difficulties for insurance to remain affordable. An empirical concept of affordability is required as the affordability of adaption strategies is an important concern for policymakers, yet such a concept is not often examined. Therefore, a robust metric with a commonly acceptable affordability threshold is required. A robust metric allows for a previously normative concept to be quantified in monetary terms, and in this way, the metric is rendered more suitable for integration into public policy debates. This paper investigates the degree to which risk-based flood insurance premiums are unaffordable in Europe. In addition, this paper compares the outcomes generated by three different definitions of unaffordability in order to investigate the most robust definition. In doing so, the residual income definition was found to be the least sensitive to changes in the threshold. While this paper focuses on Europe, the selected definition can be employed elsewhere in the world and across adaption measures in order to develop a common metric for indicating the potential unaffordability problem.},
  language  = {en}
}