• Flood insuranceImproving Use of Flood Insurance

    DHS S&T and partners will study improvements to flood insurance, identifying ways to expand the use of flood insurance to reduce the financial losses suffered by homeowners and creditors in future storms.

  • Food securityGlobal Warming Increased U.S. Crop Insurance Losses by $27 Billion in 27 Years

    Higher temperatures attributed to climate change caused payouts from the nation’s biggest farm support program to increase by $27 billion between 1991 and 2017, according to new estimates from Stanford researchers. Costs are likely to rise even further with the growing intensity and frequency of heat waves and other severe weather events.

  • ExtremismCauses of Extremism Spike in U.S. Military Examined in New Study

    By Jeff Seldin

    A new study from the University of Maryland’s National Consortium for the Study of Terrorism and Responses to Terrorism found a sharp increase in the number of former members of the U.S. military who are linked to extremist groups and activities. Michael Jensen, a co-author of the study, said that the problem of extremism is primarily a problem among veterans, not a problem in the ranks of those who are currently serving.

  • Flood plainsHomes in Floodplains Are Overvalued by Nearly $44 Billion

    Analysis of sales data and flood risk data over two decades indicates that housing markets fail to fully account for information about flood risk. The findings suggest that policies to improve risk communication could influence market outcomes.

  • ARGUMENT: Cyber insuranceWar, Terrorism, and Catastrophe in Cyber Insurance: Understanding and Reforming Exclusions

    Insurance is one of the most promising tools for addressing pervasive cyber insecurity. A robust market for insuring cyber incidents could, among other things, financially incentivize organizations to adopt better cyber hygiene—thereby reducing cyber risk for society as a whole. But cyber insurance, however, is not yet mature enough to fulfill its potential, Jon Bateman writes, and endless lawsuits hamper its effectiveness. Reforms and new solutions are sorely needed.

  • Waterfront challengesWaterfront Development Added Billions to Property Values Exposed to Hurricane Florence

    By Rebecca Fowler

    Rapid development in flood-prone zones during recent decades helped boost the amount of property exposed to 2018’s devastating Hurricane Florence substantially, a new study says. It estimates that the value of property in North Carolina and South Carolina potentially exposed to flooding at $52 billion—$42 billion more than at the start of the century (in 2018 dollars). While much development took place between 1950 and 2000, financial risk rose quickly afterward because much of it clustered along coastlines and adjacent to rivers and lakes, where buildings were more vulnerable to flooding.

  • Pandemic bondsPandemic Bonds: The Financial Cure We Need for COVID-19?

    By Dror Etzion, Bernard Forgues, and Emmanuel Kypraios

    Like other financial players that have embraced innovation in recent years, insurers too have developed novel tools and products. One such innovation is catastrophe bonds. A catastrophe bond provides the issuer (usually either an insurer or a reinsurer) with financial protection in case of a major catastrophe. Most catastrophe bonds cover extreme natural events such as hurricanes or earthquakes, but some bonds cover pandemics like the one the world is facing now.

  • PerspectiveTime for Regulators to Take Cyber Insurance Seriously

    In April 1997, Steven Haase and some of his colleagues in the insurance industry hosted a “Breach on the Beach” party at the International Risk Insurance Management Society’s annual convention in Honolulu to launch the first ever cyber-insurance policy. Josephine Wolff writes that it would be years, still, before cyber insurance would generate sufficiently significant sales numbers to attract the interest of most major insurers and their customers. More than two decades later, cyber insurance has expanded into a multibillion-dollar global business, with 528 U.S. insurance firms reporting that they offered cyber-specific policies in 2018.

  • Climate & businessExtreme Weather Events Could Bring Next Recession

    Physical climate risk from extreme weather events remains unaccounted for in financial markets. Without better knowledge of the risk, the average energy investor can only hope that the next extreme event won’t trigger a sudden correction, according to new research. Experts say that the market needs to plan for weather risk, or face extreme correction.

  • Climate costs2019: Economic Losses from Natural Disasters Top $232 billion in 2019

    A new report from Aon shows that 409 natural catastrophe events of 2019 resulted in economic losses of $232 billion. Of that total, private sector and government-sponsored insurance programs covered $71 billion. The costliest individual peril was inland flooding, which caused economic losses globally of $82 billion, followed by tropical cyclone, at $68 billion.

  • FloodsComparing Floodplain Protection Today to Predicted Future Flood Losses

    A new study seeks to answer an important question related to flooding in the United States – pay now to protect undeveloped areas that are likely to flood in the future or allow developments to go ahead and pay for damage when it occurs.

  • Climate & businessThe Challenges Facing Fisheries Climate Risk Insurance

    The world’s first “Fisheries Index Insurance” scheme, launched by an international consortium in July, is a sovereign-level instrument designed to protect Caribbean fishing communities from extreme weather events which may become more frequent and intense due to climate change. But insurance schemes with the potential to improve the resilience of global fisheries face a host of future challenges, researchers say.

  • PerspectiveChanging Weather Could Put Insurance Firms Out of Business

    The fiercer storms which a changing climate produces could soon come to British shores, paralyzing trade for days. This is an example of the costs that fossil-fuel emissions may bring, The Economist writes. Insurance companies are uniquely exposed to these sorts of changes. Already, insurers are seeing disasters of unprecedented scale. Very costly disasters are becoming more frequent, while catastrophes are getting harder to predict. “Above all,” says The Economist, “insurers need to take the lead in publicizing the growing risks posed by climate change, and the need for cover.”

  • Climate threatsEnvironmental “secondary perils” an increasing threat: Swiss Re

    The catastrophe loss experience of the last two years is a wake-up call for the insurance industry, highlighting a trend of growing devastation wreaked by so-called ‘secondary perils’ – which are independent small to mid-sized events, or secondary effects of a primary disaster.

  • FloodsClimate-smart national flood insurance program

    By Dena Adler

    Last month the Midwest faced historic floods that devastated rural communities, drowned farms, contaminated water supplies, and resulted in billions of dollars in damages. As climate change exacerbates the risk of these catastrophic flooding events, Congress can help citizens take these actions to adapt to the risks of climate change by adopting a package of climate-smart reforms for the National Flood Insurance Program (NFIP).