Insuring Climate Catastrophes in Florida: An Analysis of Insurance Pricing and Capacity under Various Scenarios of Climate Change and Adaptation Measures

The combined influences of a change in climate patterns and the increased concentration of property and economic activity in hazard-prone areas has the potential to threaten the availability and affordability of insurance in some regions. This paper evaluates the premiums that private insurers are likely to charge and their ability to cover residential losses against hurricane risk in Florida as a function of (a) recent projections on future hurricane activity in 2020 and 2040; (b) insurance market conditions (i.e., soft or hard market); (c) the availability of reinsurance; and (d) the adoption of adaptation measures (i.e., implementation of physical risk reduction measures to reduce wind damage to the structure and buildings).