Optimizing public private risk transfer systems for flood risk management in the Upper Tisza Region

Ermoliev Y, Ermolieva T, & Galambos I (2013). Optimizing public private risk transfer systems for flood risk management in the Upper Tisza Region. In: Integrated Catastrophe Risk Modeling: Supporting Policy Processes. Eds. Amendola, A, Ermolieva, T, Linnerooth-Bayer, J & Mechler, R, Dordrecht: Springer. DOI:10.1007/978-94-007-2226-2_15.

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Abstract

This chapter summarizes studies on the development of a financial risk management model for floods in the Upper Tisza river region, Hungary. We focus on the evaluation of a multi-pillar flood loss-spreading program involving partial compensation to flood victims by the central government, the pooling of risks through a mandatory public-private insurance on the basis of location-specific exposures, and a contingent ex-ante credit to reinsure the pool's liabilities. Policy analysis is guided by GIS-based catastrophe models and stochastic optimization methods with respect to location-specific risk exposures. We use economically sound risk indicators leading to convex stochastic optimization problems strongly connected with non-convex insolvency constraint and Conditional Value-at-Risk (CVaR).

Item Type: Book Section
Uncontrolled Keywords: Flood risk; Catastrophe modeling; Natural risk insurance; Stochastic optimization; Contingent credit; CVaR
Research Programs: Advanced Systems Analysis (ASA)
Ecosystems Services and Management (ESM)
Bibliographic Reference: In: A Amendola, T Ermolieva, J Linnerooth-Bayer, R Mechler (Eds); Integrated Catastrophe Risk Modeling: Supporting Policy Processes; Springer, Dordrecht, Netherlands pp.245-262
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Depositing User: IIASA Import
Date Deposited: 15 Jan 2016 08:49
Last Modified: 10 Feb 2016 16:02
URI: http://pure.iiasa.ac.at/10599

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