Background and Problem Statement
One recurring theme in Disaster Risk Reduction (DRR) is the potential role of the insurance industry in mitigating as well as responding to risk. The debate is sometimes polarized. One side laments that insurers haven’t done enough to re-examine their role and, therefore, haven’t “stepped up” with products that include preventative and/or multi-hazard protections, or with new partnerships that enable an integrated approach to providing preventative, as well as recovery coverage. Insurers themselves point out that regulation (for example, the Stafford Act, which explicitly only funds insurance for hazards already experienced), competing mitigation standards, the lack of broadly agreed preventative metrics, market readiness, and related factors discourage or block innovations they would otherwise like to implement.
Both sides may be right. The symposium will therefore examine the innovation issue, with specific reference to:
- Mitigation and adaptation. We will address how the insurance industry’s role in these areas is changing and how it will change in the future. What is the optimal role, what are the barriers; what policy changes and data would be needed, and what standards would be applied?
- Parametric insurance. This is a bit like Bigfoot – often rumored but seldom seen. However, it would in theory provide tools to support mitigation, in addition to having a role in business continuity and other aspects of disaster recovery. Yet it appears to be available in some parts of the world, and for some issues, but not others. Why is that? What will it take to make it work – what data and models, what regulation and policy changes, and what else? What changes in industry, public, and government buying behaviors are needed?
