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A first analysis on the need to integrate ecological aspects into financial insurance

Valente, Donatella, Miglietta, Pier Paolo, Porrini, Donatella, Pasimeni, Maria Rita, Zurlini, Giovanni, Petrosillo, Irene
Ecological modelling 2019 v.392 pp. 117-127
disasters, economic impact, ecosystem services, empirical models, insurance, issues and policy, landscapes, principal component analysis, risk, risk reduction, social capital, social environment
It is known that financial insurance can address the economic impacts of a natural disaster, but some ecological aspects can play a crucial role in mitigating the overall risks for socio-ecological systems. To better strengthen the study of these relations, the aims of this paper are: (1) to analyze the main research topics of the scientific literature on ecological and/or financial-economic insurance to face natural disasters, through a co-word network analysis; (2) to analyze the temporal trends of the total Gross Insurance Premium and Meteorological and climatological extreme events in 29 OECD countries; and (3) to carry out a Principal Component Analysis (PCA) of some selected variables in order to conceptualize a first empirical model combining financial-economic and ecological insurance to face natural disasters. The literature review has shown a predominance of topics related to financial insurance (about 60%), and the co-word map of key words has highlighted a common space where economic and ecological insurances interact. PCA highlighted three major components explaining 90.6% of the overall variation and discriminating aspects more related to the “financial” insurance, from those related to the “ecological” insurance. More in detail, PC1, which represents the financial insurance, explains the 60.4% of variation, PC2 and PC3 that represent surrogates of the “ecological” insurance explain respectively the 19.6% and the 10.6% of variation. On the basis of the application of the proposed empirical model, countries with high levels of financial and ecological preparedness have been identified. The next steps of this research will be focused on a pilot study area where a quantitative assessment will be applied to better define the landscape contribution to natural disaster risk mitigation, the analysis of the role of social capital through a cross-scales approach, in terms of policies and management strategies, and the investigation of innovative economic tools to take into account specific payment for ecosystem services in the context of natural disasters.