Understanding Catastrophe Insurance as a Commons?

Area of Science:

• Public Policy
• Insurance Studies
• Environmental Economics

Background:

• Neoliberalism typically favors private, market-based insurance over social programs.
• Catastrophe insurance presents an exception to the trend of state withdrawal from social insurance.
• Understanding the unique nature of catastrophe insurance is crucial for effective policy.

Purpose of the Study:

• To reframe catastrophe insurance within public goods and commons frameworks.
• To analyze the persistence of public intervention in catastrophe insurance.
• To explore the challenges of collective action in polycentric insurance systems.

Main Methods:

• Conceptual analysis of catastrophe insurance within public goods theory.
• Examination of the "state withdrawal hypothesis" in relation to catastrophe insurance.
• Analysis of the public good dimensions and polycentricity of insurance systems.

Main Results:

• Catastrophe insurance functions as a hybrid public good, benefiting many but threatened by exclusion.
• Market-based, risk-based premiums can lead to unaffordability and insurance gaps, creating a "public bad."
• Public intervention persists due to the public good nature of catastrophe insurance.

Conclusions:

• Catastrophe insurance requires a public goods and commons approach, not solely market-based solutions.
• Polycentric insurance systems necessitate collective action for effective prevention strategies.
• Public intervention is vital to address insurance gaps and ensure widespread access to catastrophe coverage.