Risk of flooding and insurance in The Netherlands

摘要

The loss potential from flooding damage in the Netherlands is enormous. Losses in the order of 100 billion Euro resulting from sea floods and 50 billion Euro for river floods are conceivable. Recently, relative small river flooding events occurred in December 1993 (loss of 100 million Euro) and January 1995 (loss of 80 million Euro). In September 1998, heavy rainfall occured causing losses of some 500 million Euro. In the Netherlands a combination of damage sharing and construction of flood defences has been applied over many centuries. Recently it has been studied if insurance could be added to this mix. Insurance of whatever form is a tool for spreading negative consequences rather than removing them. It will be concluded that insurance of catastrophical floods seems not to be attractive, but that insurance of damage as a result of local heavy rainfall may be attractive.