Insurable Risks, Regulation, and the Changing Insurance Environment

Abstract

The aim of this chapter is to elucidate some facets of the property-casualty business, particularly as it is affected by landfalling hurricanes. Accordingly, a review of insurance principles and a definition of different types of risk are first presented. The impact of hurricane landfall patterns, considered within the context of different forecast lead times, is then discussed. Because the level of risk to life and property is related as much to actions taken by human beings as it is to the level of the underlying natural risk, I underscore the importance of loss mitigation through a proactive strategy that promotes prudent loss-reduction actions, such as improved and better enforced building codes, the implementation of more rational land-use policies, and greater efforts to inform the public of the levels of risks to natural disasters in different regions.