Risk Management Roles of the Public and Private Sector

24 Pages Posted: 26 Mar 2018

See all articles by Carolyn Kousky

Carolyn Kousky

Resources for the Future

Howard Kunreuther

University of Pennsylvania - Operations, Information and Decisions Department; National Bureau of Economic Research (NBER)

Date Written: Spring 2018

Abstract

Insurance is an essential component of household and community resilience. It protects insureds financially against disaster losses, can encourage investments in cost‐effective mitigation measures through premium reductions, and facilitates the rebuilding of property and long‐term recovery. Private insurers face challenges in providing full protection against disasters. This has led governments around the world to create a variety of public insurance entities, often designed as public‐private partnerships. At a November 2016 workshop, “Improving Disaster Financing: Evaluating Policy Interventions in Disaster Insurance Markets,” participants evaluated disaster insurance programs for flood, earthquake, and terrorism losses. This article synthesizes six papers and findings from the workshop and suggests ways to improve public‐private partnerships for disaster financing in three interrelated areas: (1) risk communication, (2) risk reduction, and (3) risk transfer. It concludes with a proposal for a comprehensive insurance program that could harness the benefits of both the public and private sectors.

Suggested Citation

Kousky, Carolyn and Kunreuther, Howard C., Risk Management Roles of the Public and Private Sector (Spring 2018). Risk Management and Insurance Review, Vol. 21, Issue 1, pp. 181-204, 2018. Available at SSRN: https://ssrn.com/abstract=3149185 or http://dx.doi.org/10.1111/rmir.12096

Carolyn Kousky (Contact Author)

Resources for the Future ( email )

1616 P Street, NW
Washington, DC 20036
United States

Howard C. Kunreuther

University of Pennsylvania - Operations, Information and Decisions Department ( email )

3730 Walnut Street
558 & 559 Jon M. Huntsman Hall
Philadelphia, PA 19104-5340
United States
212-854-0423 (Phone)
215-573-2130 (Fax)

National Bureau of Economic Research (NBER)

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