CWA

Netherlands Climate Insurance Program

Scientific evidence shows that globally economic losses from natural disasters have been rapidly increasing over the past decades. Extreme precipitation, river flooding and droughts inflict much damage, especially in low-lying deltaic areas as the Netherlands. More damage in the future can be expected if climate change causes more extreme weather events, such as more intense precipitation. Emerging questions are whether current water management is robust against climate change and what adaptation measures can be designed in response to heightened risks. Financial and insurance arrangements are explored to alleviate impacts of climate change. In particular, it is examined whether the current scheme of providing compensation of flood damage via the government (WTS) is the most efficient and desirable way from a social-welfare perspective to compensate damage or if a larger role of private insurers is desirable. Moreover, possible impacts of climate change on existing insurance arrangements in the Netherlands are investigated.

The objective of the NCIP project is to investigate whether current financial arrangements of damage caused by extreme weather are sustainable and economically efficient under climate change. The project will develop and evaluate alternative insurance arrangements to cope with changing risks. It will be examined how climate change and socioeconomic factors affect potential flood damage and what roleinsurances can play in mitigating damage.