Geoscience Reference
In-Depth Information
It is likely that there will be an increasing number of open-access models and
initiatives in the future. An increase in the diversity of the models should lead to a
more complete assessment of risks, particularly with catastrophe modelling. The
insurance sector should therefore become as involved as possible in open access
initiatives, and share as much data and information as is permissible, as it is likely
these models will be an alternative source of information in the future.
17.5
Insurance and Disaster Risk Management
There are different approaches to managing disasters and catastrophe risk, but they
all use the core concepts of risk assessment, risk mitigation, risk transfer and pre-
paredness. The development of a risk management strategy then requires a combi-
nation of strong domestic political motivation and a high level of international
cooperation to provide expertise and funding. The insurance sector is often called
upon to provide the expertise and funding, and the development of appropriate
insurance products and alternative risk transfer instruments should always comple-
ment the risk reduction activities.
Box 17.3 Catastrophe Programmes
The World Forum of Catastrophe Programmes (WFCP) (
www.wfcatpro-
grammes.com
)
was initiated in 2006 to promote the use of public-private
partnerships for managing risk and facilitate the exchange of information
and expertise amongst its members and with external national and interna-
tional organisations, including consultants and researchers interested in
catastrophe (natural and terrorism) insurance. The Caribbean Catastrophe
Risk Insurance Facility (CCRIF) (
www.ccrif.org
) is the fi rst multi-country
risk pool based on parametric policies backed by both traditional and capital
markets.
In Mexico, a catastrophe bond sold for $290 billion provides parametric
insurance for hurricanes and earthquakes. Catastrophe property insurance
programmes, such as the Earthquake Commission (EQC) in New Zealand,
have been initiated to promote insurance markets with the objective of achiev-
ing affordable catastrophe insurance for dwellings. Examples of mandatory
insurance include the Turkish Catastrophe Insurance Pool (TCIP) and the
Romanian catastrophe property insurance programme (PRAC). The
Californian Earthquake Authority (CEA), one of the largest providers of resi-
dential earthquake insurance in the world, is a publicly managed, largely pri-
vately funded entity.
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