7.4.5 Extending the Limits of Insurability
The extreme Dutch flood risk has traditionally been seen by the industry as a difficult risk to insure.
However, it is claimed by that recent technological advancements have extended the range of
insurability to include even flood risk in the Netherlands (Swiss Re, 2012). For instance, the availability
of satellite data combined with improved computing power has resulted in more accurate flood modelling
capabilities, meaning that it is easier to accurately understand and assess flood risk than it used to be. It
is doubtful, however, how far these changes would contribute to extending the limits of insurability for
flood risk in the Dutch context. Regardless of new underwriting methods, there would have to be limits to
exposure for private insurers. A large flood could still lead to commercial insurers becoming bankrupted
or them withdrawing coverage as happened in the aftermath of the 1953 losses. Some form of state
guarantee or public reinsurance is necessary in a country where potential flood losses above a threshold
would be of a scale beyond the capacity of domestic insurance companies, particularly the smaller ones
even with risk transference mechanisms such as reinsurance.
73
Bạn đang xem 7. - LET THE MARKETS IN! A QUESTION OF PRIVATE FLOOD INSURANCE IN THE NETHERLANDS?
