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Managing Catastrophic Risks through Redesigned Insurance: Challenges and Opportunities

Topics: Emergency Management,

This paper discusses the increase in catastrophic risks associated with natural disasters and more people and businesses locate in hazardous areas with taking appropriate protective measures. The authors analyze the behavioral biases that lead to this lack of investment in adequate protection. The paper develops several proposals for risk management strategies that involve public-private partnerships. These include restructured insurance, tax incentives, and increased enforcement of building codes.

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