Government-sponsored natural disaster insurance pools: a view from down-under

International Journal of Disaster Risk Reduction, Volume 15, March 2016, Pages 1–9, doi:10.1016/j.ijdrr.2015.11.004:

This study analyses various government-sponsored natural disaster insurance pools in the US, New Zealand, Spain and France, as well as arrangements under consideration in the UK and their absence in the Netherlands. It samples from the spectrum of possible arrangements and highlights certain challenges that beset all of them in dealing with the rising cost of natural disasters. Following a brief overview of the various pools examined, subsequent discussion centres upon three questions: How do the pools price risk? How are deficits funded? Do the pools encourage disaster risk reduction? It then draws upon some illustrative examples from recent Australian experience of the role played by poor land-use planning in amplifying the cost of natural disasters and conclude with some discussion on the capacity of the insurance industry to help overcome this problem.