Insuring Large-Scale Floods in the Netherlands
- 2 April 2008
- journal article
- Published by Springer Science and Business Media LLC in The Geneva Risk and Insurance Review
- Vol. 33 (2), 250-268
- https://doi.org/10.1057/gpp.2008.10
Abstract
Without its primary flood defenses, a large part of the Netherlands would be swallowed by rivers and the sea. Floods caused by the failure of primary flood defenses are high-impact, low-probability events that are notoriously difficult to insure. Private insurance was long considered unfeasible but the Dutch government is currently studying ways to introduce a public–private insurance program. This paper offers a discussion of variables that should be taken into account in the choice for an arrangement for the financing of large-scale floods in the Netherlands. Because flood risk is highly concentrated and potential losses could be severe, a strong government role seems inevitable. But this would not necessarily be inappropriate as this could reduce the risk of underinvestment in flood protection.Keywords
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