Economics Research Seminar

“Five ”centennial“ floods in 25 years in Austria: How many more opportunities to fix market failure in insuring floods will be needed or will climate change help to solve the problem?”

The survey talk reflects on the failure to establish a risk transfer mechanism that provides a sound insurance scheme against the increasing risk of flooded property values in Austria. Starting from a fundamental result in dynamic social choice under risk, practical reform measures will be discussed as well as risk models for 7.000 years of flood risk experience and a first approach that allows for a comparison of riverine versus pluvial flood hazards. A preliminary conclusion on how the question of insurability of flood risk will keep changing under climate warming conditions is being drawn.