Regional hurricane risk management: A multi-stakeholder, multi-strategy policy analysis tool
This talk described a computational framework that can be used to identify hurricane risk management policy solutions based on behavior of the system as a whole, including interactions among multiple types of stakeholders (homeowners, insurers, government, reinsurers) and strategies (retrofit, insurance, property acquisition). It provides specific recommendations for government policymaking and describes the outcomes different stakeholders would experience under various policies, allowing identification of policies that are likely to have broad support. The framework includes multiple interacting mathematical models—stochastic programming optimization models to represent government and insurer decisions, a Cournot-Nash model of insurer competition, empirical discrete choice models of individual homeowner decisions, computable general equilibrium model of the regional economy, and a regional loss estimation. A full-scale application for hurricane risk in eastern North Carolina suggests it is possible to identify system-wide win-win solutions that are better both for each stakeholder type individually and for society as a whole. The talk concluded with directions for on-going research taking place through the new CHEER Hub.
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