Data from VU University Amsterdam Advance Knowledge in Climate Change (Risk communication nudges and flood insurance demand): Climate Change

2021 OCT 21 (NewsRx) -- By a News Reporter-Staff News Editor at Climate Change Daily News -- New study results on climate change have been published. According to news reporting originating from Amsterdam, Netherlands, by NewsRx correspondents, research stated, “Losses caused by natural disasters have been increasing worldwide, and climate change is projected to continue this trend in the future.”

Financial supporters for this research include Nederlandse Organisatie voor Wetenschappelijk Onderzoek.

The news correspondents obtained a quote from the research from VU University Amsterdam: “Insurance can be used by individuals to protect against the risk of natural disaster loss. However, individuals often purchase insufficient amounts of insurance against disaster risks, which may be due to them neglecting the likelihood of these risks which are perceived as falling below some threshold level of concern. Using choice architecture, such as alternative forms of risk communication, can nudge individuals to pay attention to natural disasters and increase insurance demand by raising perceived risk and facilitating the comprehension of low probabilities. In an online experiment, we tested whether reframing a low flood probability in terms of the cumulative likelihood across time, as well as whether visualizations of risk on ladders and grids may be effective in raising flood insurance demand. Our primary finding is that reframing of probabilities, especially in combination with the visual aids, generally raises (lowers) demand for flood insurance among younger (older) homeowners and those who are more (less) concerned about the consequences of climate change. Whereas, on average we find no significant impact on flood insurance demand of any of the risk communication tools tested either in isolation or combination.”

According to the news reporters, the research concluded: “Based on these findings, we draw several lessons for risk communication.”

For more information on this research see: Risk communication nudges and flood insurance demand. Climate Risk Management, 2021,34():100366. (Climate Risk Management - http://www.journals.elsevier.com/climate-risk-management/). The publisher for Climate Risk Management is Elsevier.

A free version of this journal article is available at https://doi.org/10.1016/j.crm.2021.100366.

Our news editors report that more information may be obtained by contacting Sem Duijndam, Department of Environmental Economics, Institute for Environmental Studies, VU University Amsterdam, De Boelelaan 1111, 1081 HV Amsterdam, Netherlands. Additional authors for this research include Peter John Robinson, W.J. Wouter Botzen, Aimee Molenaar.

(Our reports deliver fact-based news of research and discoveries from around the world.)