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Insurance - Lecture Room - Expert Meeting

Expert Meeting: The Role of Disaster Insurance in Improving Resilience

July 8-10, 2015
National Academy of Sciences Building
Washington, DC

This event brought together experts to discuss the role that insurance can play in promoting resilience in the United States, specifically to flood and earthquakes.  Several questions were considered:
  • What are the best options to mitigate and reduce losses from floods and earthquakes including:
    • Increase the number of insured people in risk-prone areas to reduce net loss
    • Understand how risk changes over time
    • Policy actions or options that incentivize mitigation (e.g., zoning, retrofitting, other incentives)
    • Link insurance with such policy tools
  • How insurance coupled with other policy tools can address the following issues:
    • Send the right signals about risks and vulnerabilities
    • Keep premiums affordable 
    • Provide protection against catastrophic losses through partnerships between private insurers and public sector entities
  • The scientific bases for using insurance to build resilience that includes:
    • Understanding how risk is changing over time 
    • Improving the accuracy of maps, catastrophe models and other tools
    • Setting premiums that reflect risk

Flood Insurance

Opening Remarks:
Howard Kunreuther, Roundtable Member
  • Share the motivation and expected outcomes for this meeting
  • Review the structure of the meeting
  • Review the key issues and questions we want to address

Panel Discussion:  The National Flood Insurance Program
  • How does the NFIP work?
  • How does NFIP deal with issues of enforcement, affordability, mitigation, and changing storm and flood patterns for reducing future losses?
  • What role could/should the private sector play in providing flood insurance? 
  • What are options and benefits for increasing the number of insured people in flood-prone areas?
Moderator: Roundtable Member, Roy Wright, Federal Insurance and Mitigation Administration/FEMA

Jo Ann Howard, Former head of the NFIP, Purpose, function, and efficiency of the NFIP
- Andy Neal, Actuarial elements of NFIP
Erwann Michel-Kerjan: Role of risk-based premiums in NFIP/flood insurance
Carl Walker, Roseville, CA: #1 CRS community in the NFIP

Panel Discussion:  Privatizing Flood Insurance in the United States 
  • What are the roles for the private sector to play with the public sector to provide better insurance options for building resilience?
  • How would privatizing flood insurance affect affordability for policy holders? 
  • How could a public-private partnership for flood insurance work in the United States?
  • What are some compelling reasons for flood insurance to be privatized? What are some compelling reasons for it not to be privatized?
  • What would be needed for a smooth transition from an NFIP-dominated flood insurance market to one that included private insurance in a more balanced way?
Moderator: Roundtable Member, General Gerry Galloway, University of Maryland

- Katherine Greig, Mayor’s Office, New York City
- Len Shabman, Resources for the Future
Hank Watkins, President, Lloyd’s US

Lunchtime Speaker
Holly Bamford, NOAA, "Thinking Ahead: Understanding flood risks in the future"
  • How will flood damage patterns change over time, and what are the mechanisms in place to reduce the impacts of floods that occur in new areas or with different intensity than for which current policies exist? Other issues to address include:  FEMA Flood Maps, and other integrated federal resources and tools; future flood risks due to climate change, sea level rise, settlement patterns, and other compounding risks; and old v. new methodologies for assessing flood risk.
Panel Discussion:  Insurance, investments, and new ways forward on flood resilience

  • How can insurance and other options and strategies foster greater resilience for flood risks? What are some of those other options?
  • How can the financial and insurance markets manage flood risk due to climate change and other long-term changes?
  • How can the decisions that drive investments also drive enhanced mitigation and resilience for floods?
  • How can the quantitative tools of the insurance industry (models, etc.) be used to quantify avoided losses due to enhanced resilience?
Moderator: Granger Morgan, Co-Chair, Resilient America Roundtable

- Samantha Medlock, White House Council on Environmental Quality
- Francis Bouchard, Zurich Insurance Group
- Alex Bernhardt, Mercer Investments

Group exercise: Expert Meeting Participants
- Build a list of options and strategies that mitigate or reduce flood losses and help communities to become more resilient to floods.

Earthquake Insurance

Opening Remarks:
Howard Kunreuther, Roundtable Member

  • What role can EQ insurance play with other policy tools to reduce future earthquake-related losses?
  • What can be done to increase penetration/adoption/demand for earthquake insurance in seismically active areas?
  • What are roles can public entities and private insurers play to build resilience in earthquake-prone communities? 
  • What can we learn from other countries (e.g. New Zealand)
  • What are expected outcomes from this workshop?
Panel Discussion:  Earthquake Insurance Market in the US
  • How can one characterize the supply and demand for earthquake insurance in the United States?
  • How does affordability of earthquake insurance affect the demand for earthquake coverage?
  • Has earthquake insurance encouraged adoption of other types of loss reduction measures? If not, why not? 
  • What can be done to improve California's public-private partnership for earthquake insurance and what are some alternative models for earthquake insurance?
Moderator: Roundtable Member, Arrietta Chakos

Glenn Pomeroy California Earthquake Authority
Janiele Maffei, California Earthquake Authority
Robert Muir-Wood, RMS (Catastrophe modeling company)
Kate Stillwell, Founder, Jumpstart Recovery (Entrepreneur)

Panel Discussion: New Ways forward for Earthquake Insurance and Resilience

  • What motivates people to buy or not buy EQ insurance?
  • How can insurance coupled with other policy tools increase community resilience with respect to the earthquake risk?
  • How do actions of retrofitting work with earthquake insurance to increase resilience?
  • What are the lessons from California and other countries that can be applied to those who reside in other seismically active areas in the United States?
Moderator: Roundtable Member, Dr. Reginald DesRoches

Rachel Davidson, University of Delaware
Frank Nutter, Reinsurance Association of America
Jon Christianson, Palomar Specialty Insurance Company
- Beat Holliger, Munich Re
Commentary - Does California Earthquake Insurance Make $ense?"
Mary Lou Zoback, Roundtable Member
Group exercise: Expert Meeting Participants
- Build a list of options and strategies that mitigate or reduce earthquake losses and help communities to become more resilient to earthquakes.


This website contains unedited papers/verbatim presentations by individuals and is not an official report of the National Academies of Sciences, Engineering, and Medicine. Opinions and statements included in this material are solely those of the individual authors. They have not been verified as accurate, nor do they necessarily represent the views of other meeting participants or the National Academies of Sciences, Engineering, and Medicine. 
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