Exploring Public-Private Insurance Partnership in Louisiana
Insuring for Resilience
Overview
Resilient homes are a community’s first line of defense in preventing adverse impacts from disasters. Motivating residents to reduce their housing exposure can be achieved through a combination of financial as well as regulatory carrots and sticks. This study focuses on reducing housing exposure to wind risks through incentives such as government subsidies, tax credits and/or premium discounts. We apply a computable general equilibrium (CGE) model that captures how insurance incentives and government cost-sharing for resilience measures affect both the home construction sector and the broader economy using region-specific data (IMPLAN) to capture the flow of goods, services, and incomes across industries, households, and government. We modeled resilience-enhancing construction options, including the cost of building upgrades and resulting loss reductions, and introduced different insurance policy designs, such as premium discounts for resilient construction, and linked these to insurer profitability targets. Simultaneously, this approach incorporated government subsidies or tax credits to offset the initial cost of resilience improvements. By running a range of scenarios, the study shows how these policy actions influence insurance uptake, capital investment in safer building, and long-term economic growth.
Team
- Dr. Melanie Gall (Principal Investigator, School of Public Affairs and CEMHS)
- Dr. Petar Jevtic (co-Principal Investigator, School of Mathematical and Statistical Sciences and CEMHS)
- Dr. Carol Friedland (co-Principal Investigator, LaHouse Research and Education Center, Louisiana State University Agricultural Center)
- Cody Delos Santos (Ph.D. student, School of Mathematical and Statistical Sciences)
- Dr. Ayat Al Assi (LaHouse Research and Education Center, Louisiana State University Agricultural Center)
- Dr. Rubayet Bin Mostafiz (LaHouse Research and Education Center, Louisiana State University Agricultural Center)