The model uses climatic and socioeconomic input data from the flood model GLOFRIS. Results show the development of the insurability of flood damage across Europe and what action could be taken to enhance the sustainability of flood insurance markets to climate change. The target group of this tool consists of policy makers, insurance companies and real estate investors.
The output of the model consists of calculated flood insurance premiums, projections of the unaffordability of flood insurance premiums. An individual within the model chooses whether they want to insurance and to what extent individual risk reduction measures are incentivized. The individual attempts to maximize their utility within the model, given financial constraints and expected insurance outcomes. This way, the uptake of insurance per region can also be calculated. Finally, the degree of incentivized flood risk reduction on the household level can be calculated. This may help stimulating individual behaviour for flood damage reduction. The format of the outputs is in maps per NUTS2 region that show the insurance uptake within these regions.
The Amsterdam city hub (APG) may benefit from the use of the DIFI tool to distinguish different possibilities for flood insurance based on their real estate investment portfolio and this may guide their investment decisions.
The tool offers insight in the insurability of flood risk in Europe. Moreover, the model can be extended to assess the reasons for a potential flood insurance gap: the level of uninsured flood risk. For example, more certainty of government aid after a flood event will reduce flood insurance demand. Outcomes may help policy makers in the stimulation of flood insurance uptake or the implementation of individual flood damage mitigation measures.
The costs are mainly working hours, as new input data needs to be inserted into the model and the model needs to be tailored to insurance markets in other regions.
The tool can be used in the following Triple-A phase:
Thijs Endendijk
t.endendijk@vu.nl
VU-IVM
Tesselaar, M., Botzen, W. J. W., & Aerts, J. C. J. H. (2020). Impacts of Climate Change and Remote Natural Catastrophes on EU Flood Insurance Markets: An Analysis of Soft and Hard Reinsurance Markets for Flood Coverage. Atmosphere, 11(2), 146.
Tesselaar, M., Botzen, W. W., Haer, T., Hudson, P., Tiggeloven, T., & Aerts, J. C. (2020). Regional inequalities in flood insurance affordability and uptake under climate change. Sustainability, 12(20), 8734.
Complementary to the REACT tool from VU-IVM.
During an extreme rainfall event, Jan watches in fear as water rises dangerously close to flooding his apartment. His experience highlights the urgent need for climate adaptation in Gdynia, inspiring the community to take action and build a more resilient future together.
