7.3 Conditions to Introduce Private Insurance
Botzen (2010) and others have made an argument for private insurance that under particular conditions
it could be beneficial to the Dutch if private insurers were to take responsibility from the public sector for
flood compensation. This pro-privatisation case rests largely on improved economic efficiency through
the private sector’s alleged superior capacity to spread risks, segregate risks, encourage loss reducing
measures, and monitor and control policyholder risks (Botzen and van den Bergh, 2008). The next
section explores the conditions under which effective private flood insurance operates as was identified
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in UK, French, and Belgian case studies in previous chapter. Differences and similarities in the
operation of private flood insurance between the case studies in relation to the Dutch context will be
explored to understand which of the conditions for effective private flood insurance are currently
present. To help frame different options for the introduction of effective private flood insurance to the
Netherlands a matrix is used to explore different potential scenarios based on two of the most important
attributes identified in national flood compensation systems.
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