Seite - 324 - in Loss and Damage from Climate Change - Concepts, Methods and Policy Options

324 L.Schäfer et al. the impact of weather events on vulnerable populations—and the response costs required to assist them—before a hazard season begins, and as it progresses. This instrument provides the hard triggers forARC’s insurancemechanism.But it also allows countries tomonitor and analyse rainfall throughout the continent and esti- matetheimpactofweatherdevelopmentsonvulnerablepopulationsin-season,“thus providingARCMemberStatesandPartnerswithan innovativeearlywarning tool” (ARC2015).Atmicro levelwefindplenty exampleswhereweather datawas col- lected togetherwithpolicyholders (e.g. through raingauges)during thedesignand set upprocessof insuranceproducts.Thisdataultimately contributed to increasing farmers’ sensitivity to changing rainfall patterns andhelping themdevelop abetter understandingofthelikelyimpactofweatheronyields(Sharoffetal.2015;Hellmuth et al. 2009). Limitsof InsurabilityasMeans toSignalWhenAdaptationLimitsAreApproached Inthecontextofincreasingclimaterisk,theconceptofinsurabilityplaysanimportant role.Vulnerability to risingclimatechangerisks isnotonlyof importance topeople butalsotheinsuranceindustryisvulnerabletorisingrisks. Increasinglycatastrophic lossesmade private insurance companies in developed countries pull out of some markets,makinginsuranceunavailableforaffectedhouseholds(Botzenandvanden Bergh 2008). Herweijer et al. (2009) therefore conclude that “climate change has the potential to threaten thewidespread availability and affordability of insurance for people and their property inmany regions, that is, the insurability of the risk.” Stahel (2003)defines theconceptof insurabilityas the“naturalborderline”between the market economy and nation states: risks that cannot be insured need not to be legislated; uninsurable risks, however, have to be dealt with by nation states.” Thereby, increasing limits of insurability can provide a strong signal that actors or systems reached the upper end of adaptation frontiers, existing on the edge of adaptationlimits.Thisinformationcouldincentiviselargescalegovernmentalaction toeffectivelyreduceriskandincrease insurability inawaythatwouldn’tbefeasible or affordable for individual actors. 13.3.2 ImprovingEx-AnteDecisionMakingwithInsurance Increasing risk of extremeweather events driven by climate change strengthen the needforamoreforward-lookingapproachtodisasterriskmanagement,withgreater focus on reducing risk before a disaster strikes (Ranger andFisher 2012).Moving awayfrompurelyex-postresponses,actorsneedtomanageriskproactively,beforea disasterstrikes.Thisincludesreducingriskex-anteandbuildinglong-termresilience against extremeweather events. PriceSignalsasMeans to IncentiviseRiskReduction? Insurancecanplaya roleasmessengerofclimatechange impacts through its terms and price signals. Insurance companies have an incentive to ‘risk price’ asmuch as possible so that they can accurately predict the probability of a claim, and the