Many natural disaster insurance markets were designed under historical distributions of climate risk that differ from those prevailing today. These differences create challenges for natural disaster insurance markets to mitigate the effects of climate change and also increase demand for innovative policy solutions.
This is a preview of subscription content, access via your institution
Access options
Access Nature and 54 other Nature Portfolio journals
Get Nature+, our best-value online-access subscription
$29.99 / 30 days
cancel any time
Subscribe to this journal
Receive 12 print issues and online access
$209.00 per year
only $17.42 per issue
Buy this article
- Purchase on Springer Link
- Instant access to full article PDF
Prices may be subject to local taxes which are calculated during checkout
References
Bragg, L. Natural Disasters State Legislative Report 2019–2020 (National Conference of State Legislatures, 2021).
Cignarale, T., Laucher, J., Allen, K. & Landsman-Smith, L. Availability and Affordability of Coverage for Wildfires (California Department of Insurance, 2019).
Wagner,K. R. H. Am. Econ. J. Econ. Policy 14, 380–421 (2022).
Masters, J. Third-Costliest Year on Record for Weather Disasters in 2021: $343 Billion in Damages (Yale Climate Change Communications, 2022).
Fisher, E., Sippel, S. & Knutti, R. Nat. Clim. Change 11, 689–695 (2021).
IPCC Climate Change 2022: Impacts, Adaptation, and Vulnerability (eds Pörtner, H.-O. et al.) (Cambridge Univ. Press, 2022).
Gaul, G. M. The Geography of Risk (Sarah Crichton Books, 2019).
Barrasa, V. Severe Weather in 2021 Caused $2.1 Billion in Insured Damage (Insurance Bureau of Canada, 2022).
Bevere, L. & Holzheu, T. Global insured catastrophe losses rise to USD 112 billion in 2021, the fourth highest on record, Swiss Re Institute estimates. Swiss Re (14 December 2021); https://go.nature.com/3Vhj0ec
Horn, D. P. & Brown, J. Introduction to the National Flood Insurance Program (NFIP) (Congressional Research Service, 2018).
Schwarze, R. & Wagner, G. Geneva Pap. Risk Insur. Issues Pract. 29, 154–168 (2004).
Fraser, R. California’s Ban on Climate-Informed Models for Wildfire Insurance Premiums (Ecology Law Quarterly, 2021).
Horn, D. P. National Flood Insurance Program: The Current Rating Structure and Risk Rating 2.0 (Congressional Research Service, 2022).
Wagner, K. R. H. Why is Reforming Natural Disaster Insurance Markets So Hard? (Stanford Institute for Economic Policy Research, 2020).
Bakkensen, L. & Barrage, L. Flood Risk Belief Heterogeneity and Coastal Home Price Dynamics: Going Under Water? NBER Working Paper No. 23854 (NBER, 2019).
Botzen, W., Aerts, J. & van den Bergh, J. Water Resour. Res. 45, 1–15 (2009).
Royal, A. & Walls, M. Risk Anal. 39, 1088–1104 (2019).
Gallagher, J. Am. Econ. J. Appl. Econ. 6, 206–233 (2014).
Horn, D. P. & Webel, B. Private Flood Insurance and the National Flood Insurance Program (Congressional Research Service, 2018).
Jaffee, D. M. & Russell, T. J. Risk Insur. 64, 205–230 (1997).
Shear, W. B. & Phillips, W. M. Catastrophe Risk: US and European Approaches to Insure Natural Catastrophe and Terrorism Risks (United States Government Accountability Office, 2005).
Polacek, A. Catastrophe Bonds: A Primer and Retrospective (Federal Reserve Bank of Chicago, 2018).
2021 Climate Change Catastrophe Report (CoreLogic Hazard HQ, 2022).
Reimann, N. 59% of Americans under heat alerts right now. Forbes (11 August 2021); https://go.nature.com/3ekLnrn
Acknowledgements
I am grateful for helpful discussions with M. Duggan, M. Fowlie, M. Kotchen and J. Shapiro.
Author information
Authors and Affiliations
Corresponding author
Ethics declarations
Competing interests
The author declares no competing interests.
Rights and permissions
About this article
Cite this article
Wagner, K.R.H. Designing insurance for climate change. Nat. Clim. Chang. 12, 1070–1072 (2022). https://doi.org/10.1038/s41558-022-01514-2
Published:
Issue Date:
DOI: https://doi.org/10.1038/s41558-022-01514-2