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13 ExploringandManagingAdaptationFrontiers… 327
security” (Surminski and Oramas-Dorta 2013) might reduce the urgency for risk
preventionand reduction, and thereby increasevulnerability toextremeevents.
13.3.3 InsuranceasaSupportTool forActors toRemain
in theTolerableRiskSpace
Effectivelymanaging increasing climate change risk is a precondition for actors to
remainwithin the tolerable risk space (Mechler andSchinko 2016). Insurance can
support riskmanagement strategies ex-post as safety net andbuffer for people and
countries, particularly for lowfrequencyandmoderate tohighseverity risks.
ProvidingaSafetyNetandBuffer: InsuranceasPartofContingencyStrategies
Contingency strategies,managingunexpected shocks fromclimate stressorswhich
couldnothavebeenreasonablyanticipatedthroughpre-emptiveactions,canprovide
akeymeansforactors toremainwithin the tolerable riskspace.Thesestrategiesare
needed, in addition to planning and pre-emptive undertakings, as some climate-
relatedimpactareunforeseeableat thetimeofplanningorthemagnitudeofclimate-
relatedimpactsmightsurpassesestimates.Also,incaseswhereunforeseenimpactsor
costsarosefromtransboundaryclimatechangeimpactsorresponsesorimpactswere
foreseeable, but response actionswere economically or technologically unfeasible
at the timeofplanning,contingencyapproachesarenecessary.Thestrategiesshould
complement and facilitate approaches to address longer-term incremental climate
impacts, risks, andvulnerabilities associatedwithclimatechange.
Insuranceplaysan important roleaspartofcontingencystrategies.Byproviding
timelyfinancethat improvesfinancial liquidityshortlyafteradisaster, insurancecan
playa role as a safetynet andbuffer forpeople andcountries shortly after anevent
(Warner et al. 2012).Under these circumstances, insurance canhelp the insured to
better absorb shocks, as theymaynot have to resort to coping strategies thatmight
impedesustainabledevelopment(Okonjo-IwealaandThunell2015).Timelyandreli-
able payouts enable households to protect their livelihoodswhenadisaster strikes:
It canhelp individuals tocover lossesanddamages, stabilise their income,purchase
foodandothernecessitiesandavoidcostlyassetdepletion,ultimatelyallowingpeo-
ple tochoosealternativemeansofcopingwithnegative shocks (Derconetal. 2005;
Barrettetal.2007;SkeesandCollier2008).There issignificantevidence that insur-
ancetoolscanhelppeopletoreducedistressassetsalesandtoincreasefoodsecurity,
bothenabling faster recoveryafter a shock (Greatrexet al. 2015;Bertram-HĂĽmmer
andKraehnert2015;Reyesetal.2015;JanzenandCarter2013).Basedonthetimely
finance, insurancecanalsohelptoavoidbusinessinterruptionsandfiscaldeficitsand
postdisaster loans (e.g.CCRIFSPC2010).Byreducing the residual risk that could
notbereducedbymeasuresalreadytaken, insurancecanhelp lessenfinancial reper-
cussionsofvolatilityand, in the longer term,helppeople toadapt toclimatechange.
Insurance is an adaptationmeasurewhen it reduces theburdenof climate impacts,
risks, andvulnerabilities, if not theaverage loss (Linnerooth-Bayeret al. 2010).
Loss and Damage from Climate Change
Concepts, Methods and Policy Options
- Title
- Loss and Damage from Climate Change
- Subtitle
- Concepts, Methods and Policy Options
- Authors
- Reinhard Mechler
- Laurens M. Bouwer
- Thomas Schinko
- Swenja Surminski
- JoAnne Linnerooth-Bayer
- Publisher
- Springer Open
- Date
- 2019
- Language
- English
- License
- CC BY 4.0
- ISBN
- 978-3-319-72026-5
- Size
- 16.0 x 24.0 cm
- Pages
- 580
- Keywords
- Environment, Climate change, Environmental law, Environmental policy, Risk management
- Categories
- International
- Naturwissenschaften Umwelt und Klima