. YET, IN THE NETHERLANDS, FOLLOWING THE CATASTROPHIC 1953 NORTH...

2012). Yet, in the Netherlands, following the catastrophic 1953 North Sea flood, the insurance industry

withdrew flood insurance from the market, citing the commercially unacceptable degree of flood risk the

country faces. Since then, the Dutch government has assumed responsibility for flood compensation.

With the continued encroachment of urbanisation into flood prone zones, such as sea boards and

floodplains, if no significant private flood insurance is made available, the overall liabilities associated

with flood risk that the Dutch government currently underwrites can be expected to increase further

(Aerts & Botzen, 2011, Pryce & Chen, 2011). This situation is regarded as problematic by those who

consider the current public arrangement as an inadequate and economically inefficient response to more

extreme weather events.

Floods come in more different forms than other natural disasters including flash floods, river floods,

storm surges, dam or dike breaches, ground water saturation, torrential rain and tsunami. Devastating

floods, in common with other natural disasters, can never be completely avoided and are known to be

difficult to insure for reasons related to their low probability and high impact. Recently, however, as a

consequence of improvements in risk modeling, the insurance industry is reassessing the limits of what

is thought to be technically insurable (Swiss Re, 2012) and insurers are once more looking to sell flood

insurance to the Dutch public

¹

. Against this backdrop, whether it is still appropriate that the Dutch

government remains the sole actor liable for the compensation of potentially huge losses from flooding is

a valid question that deserves critical examination.

1

In 2012, a startup company, Neerlandse, began selling an online flood insurance directly to the Dutch public and the Dutch

Association of Insurers proposed a mandatory flood insurance system. Both these recent developments are highly significant

to the Dutch context where for many decades flood risk has been viewed as too great for the private insurance industry to

cover. Neerlandse is not a member of the Dutch Association of Insurers.

8