Lab Notes

The Wharton Risk Center blog, Lab Notes, analyzes innovative risk and resilience ideas, offers timely policy insights, and introduces our new research.

Conversations about Risk Rating 2.0 – Part III with Dave Burt

For the third post in our Risk Rating 2.0 series, the Wharton Risk Center talks with Dave Burt, Founder & CEO of DeltaTerra Capital, an investment research company providing impact assessment tools and working with policy makers to help minimize the damage done to homeowners as asset value adjustments happen.

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Conversations about Risk Rating 2.0 – Part II with Nancy Watkins

We take a deeper look at how to understand flood risk and catastrophe models with Nancy Watkins in the second post of a Q&A-style blog series with a range of experts on the pricing of flood insurance.

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Conversations about Risk Rating 2.0 – Part I with David Maurstad

The Wharton Risk Center is pleased to share a blog series with a range of experts on the pricing of flood insurance and is delighted to begin this series with an interview between our Executive Director, Dr. Carolyn Kousky, and the head of the NFIP, David Maurstad.

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Recent Blog Posts:

Conversations about Risk Rating 2.0 – Part IV

In the fourth and final post in our Risk Rating 2.0 series, the Wharton Risk Center had the chance to hear from two flood insurance agents on what, if any, impacts they are already seeing from the changes to the NFIP. Read More

Conversations about Risk Rating 2.0 – Part III

For the third post in our Risk Rating 2.0 series, the Wharton Risk Center talks with Dave Burt, Founder & CEO of DeltaTerra Capital, an investment research company providing impact assessment tools and working with policy makers to help minimize the damage done to homeowners as asset value adjustments happen. Read More

Conversations about Risk Rating 2.0 – Part I

The Wharton Risk Center is pleased to share a blog series with a range of experts on the pricing of flood insurance and is delighted to begin this series with an interview between our Executive Director, Dr. Carolyn Kousky, and the head of the NFIP, David Maurstad. Read More

Updates & Perspectives: Climate Action & the SEC

On March 21, 2022, almost exactly a year after SEC Chairman Gary Gensler was confirmed on his commitment to focus on climate-related disclosure, the SEC proposed a rule to enhance and standardize climate-related disclosures for investors. This article explores the background of climate-related disclosures, the implications of the proposed rule change, and perspectives on its ...Read More

Wharton’s Delegation to ClimateCAP 2022

From February 25 – 26, eight graduate students from the University of Pennsylvania attended the third Climate CAP: The Global MBA Summit on Climate, Capital, and Business, which was held at Northwestern University – Kellogg School of Management. Read about their experiences in this post by Kailun Yin who also attended. Read More

How Insurers Can Support Climate Adaptation

Insurers have a unique opportunity to take on a climate risk translation role that expands the concept of insurance beyond the single client/single year paradigm to drive reductions in climate impacts, protecting the long-term availability, affordability, and reliability of insurance. Read More

Machine Learning Models for Predicting, Understanding and Influencing Health Perception

Although there are many determinants of face mask-avoidance and related risky behaviors, one key factor is perceived severity of COVID-19. Understanding such health perceptions is necessary for influencing and improving behavior during the crisis. Considerable research in psychology and marketing has found that people are not good at evaluating the severity of different health conditions. ...Read More

Direct Air Capture: Costs, Benefits, and the Future

While Direct Air Capture technology faces several challenges including resource limitations and risks such as over-reliance, carbon storage costs and safety, and unsustainable uses of captured carbon, research from the IPCC has shown that it will be required to reach emissions targets. Read more from recent graduate, Hiyori Yoshida. Read More

The Role of Home Equity in Flood Insurance Demand

As millions of homes in the U.S. are exposed to increasing flood risks, the lack of insurance coverage can threaten the sustainability of the mortgage system as we know it. Yanjun (Penny) Liao and Philip Mulder share insights from their recent paper “What’s at Stake? Understanding the Role of Home Equity in Flood Insurance Demand”. Read More

Historic Preservation and Sea Level Rise

Sea level rise is an inherent threat to the physical integrity and long-term existence of coastal historic places. The need for action is widely accepted, but the question of how to appropriately balance sea level rise adaptation and historic preservation goals varies across communities. Read More

Encouraging Resiliency With Auto-Enrollment in Supplemental Flood Insurance Coverage

Can private insurance encourage homeowners to adapt their properties in order to reduce escalating flood losses from climate change? A recent study finds substantial demand for a novel supplementary flood insurance product that funds low-cost adaptations to reduce future damage when rebuilding after a flood—and shows that auto-enrollment increases that demand. Read More

Washington DC’s Environmental Impact Bond – A Q&A with Benjamin Cohen

The city of Washington DC’s Environmental Impact Bond (EIB) offering, the first of its kind within the United States, presents a new blueprint for capitalizing municipal resilience projects while better managing the risk associated with severe storms and flooding. Alison Milman, a UPenn Undergrad, speaks to Benjamin Cohen from Quantified Ventures about this EIB. Read More

Status Update: Climate Action & the SEC

With Gary Gensler’s confirmation as the new Chair of the Securities and Exchange Commission (SEC), it’s increasingly clear that we will see increased climate disclosure requirements. Ben Thomas outlines recent developments in the space and some roadblocks the Commission will face moving forward. Read More

The Smart Grid, A Smart Investment

Monica Volodarsky, a senior at the Wharton School, argues that the US should transition from its current electrical system to the smart grid, a network that utilizes digital communication technology to react to changes in electricity usage, in this blog post. Read More

How to manage political risk in a post pandemic world

Originally on EY, this blog post highlights how leaders should assess the political risk their organizations face as well as its impact; who has responsibility for managing it; the tools available to them; and where political risk management sits in the governance structure. Read More

Disaster Relief: Why the Poor Need Higher Priority

Originally on Knowledge@Wharton, learn why scholars who study disaster recovery are advocating for better federal policies — and greater funding — to help the most vulnerable communities and citizens prepare and rebound from hurricanes, fires, floods and other catastrophes. Read More

PennApps 2020 – Hack for Resilience

From Friday, September 11 to Sunday, September 13, the third annual the Hack-for-Resilience competition (“H4R”) was hosted by Wharton Risk Center and the Insurance Information Institute’s (“Triple-I”) Resilience Accelerator as part of the PennAppsXXI hackathon. Read More

Low-Income Households Should Be Prioritized After Disaster Strikes

Low-income households too often slip through the cracks of relief and recovery assistance. In many cases, this is by design. Our disaster policies do not provide equitable help, leaving those most in need with insufficient resources to respond and rebuild. Originally posted on The Hill, read this Op-Ed from Carolyn Kousky and Carlos Martin. Read More

Fundraising for an Effective Cause During an Unrelated Crisis

COVID-19 has disrupted nearly every aspect of daily life and captured the world’s attention. Governments, nonprofits, and individuals have directed billions of dollars to COVID-19 relief. Although these efforts are commendable, the attention to the pandemic likely overshadows the urgency of other causes for which donations translate to proven impact. Read More

Reducing California Wildfire Losses

California has faced challenges over the years in convincing communities and property owners to adopt land use measures to reduce the likelihood of a fire spreading, notably in areas that are most prone to this risk: the wildland-urban interface (WUI). California’s current fires are a reminder of the need for undertaking strategic measures now to ...Read More

Quantifying 50 Years of Misogyny in Music

Cultural items, such as songs, books, movies, etc. influence their consumers’ behavior. At the same time, they also represent the setting and environment they are produced in. Dr. Reihane Boghrati discusses her research on misogyny in music in this blog post. Read More

Why We Need Community-Based Catastrophe Insurance

As climate change drives up disaster losses, risk transfer tools can help provide financial resiliency to households and communities. Can innovative approaches to disaster coverage help? Originally published by BRINK, read more from Risk Center Executive Director, Carolyn Kousky, and Andy Read of Guy Carpenter. Read More

How To Combat the Corona-Recession and Climate Change

First published in Svenska Dagbladet, Arthur van Benthem, Co-Lead of The Risk Center’s Business, Climate and Environment Lab, and others discuss their research on coronavirus-related policy interventions that present an opportunity to do things that also benefit the climate. Read More

How to Change Anyone’s Mind

The Catalyst: How to Change Anyone’s Mind, a new book by Risk Center Senior Fellow Jonah Berger, introduces a revolutionary approach to change. “Successful change isn’t about pushing harder or exerting more energy. It’s about removing barriers.” Read More

Hack-for-Resilience at PennApps XX

This year, the Wharton Risk Center and the Insurance Information Institute once again teamed up to sponsor a “Hack-for-Resilience” at PennApps. Prizes were awarded to the teams with the best overall Hacks-for-Resilience and the teams that made the best use of “Insurtech” to advance resilience. Read More

Rewarding Communities that Build for the Future: A Resilience Policy Score

One step to start encouraging local governments to pay more attention to disaster costs is a community resilience policy score. This could be used by insurers to offer more competitive rates in higher scoring areas, by rating agencies in assessing bond ratings for hazard-prone locations, or by FEMA in allocating disaster aid. Read More

Incentivizing Local Governments to Manage Disaster Risk More Effectively

To effectively reduce federal exposure to disaster losses and simultaneously encourage local governments to better manage their risk and invest more in cost-effective risk reduction measures, FEMA should widely eliminate assistance for the repair and reconstruction of public buildings, exempting small and financially challenged communities that would not otherwise recover. Read More

The Role of Natural Disaster Insurance in Recovery and Risk Reduction

As climate change continues to influence extreme events, the role of insurance in adapting to these changes is becoming an increasingly important topic. In theory, insurance has a critical role to play in promoting disaster resilience. However, empirical papers cleanly identifying the relationships between insurance and recovery and mitigation outcomes is surprisingly limited. Read More

Moving the Needle on Closing the Flood Insurance Gap

In October 2018, the Wharton Risk Center’s Policy Incubator hosted a workshop designed to evaluate policy options for expanding the number of people with flood insurance in the United States. In our most recent issue brief, we present seven approaches that workshop participants felt had the potential to generate substantial increases in take-up rates across ...Read More

How Insurance Companies Influence Households’ Flood Insurance Choices

Households face a high-stakes problem in selecting an insurance contract. How much coverage should they buy? What deductible should they choose? The household must weigh premiums paid today against losses from an unlikely – but possibly catastrophic – future event such as a flood. Often, the household has never experienced the insured event and may ...Read More


The University of Pennsylvania is home to the world’s first and one of the largest student-run hackathons. Over one weekend in early September roughly 1,200 students converged for PennApps. Over 3,000 students had applied to attend. This year, the Wharton Risk Center’s Policy Incubator and the Insurance Information Institute teamed up to ...Read More

Florida’s Private Residential Flood Insurance Market

Florida homeowners are extremely vulnerable to flood damage, yet many of those at risk are uninsured. Drawing on our recent report, The Emerging Private Residential Flood Insurance Market in the United States, our newest issue brief describes the Florida market and the measures the state has taken to support its growth. Read More

The 3 Maps That Explain Residential Flood Insurance Purchases

While take-up rates in many parts of the country remain low for flood insurance, there are places where many households are insured and, surprisingly, places where most flood insurance is purchased outside of the FEMA-mapped high-risk areas. We offer three findings about residential NFIP purchases as demonstrated in three maps. Read More

Oregon Improves Agent Knowledge of Flood Insurance

For many people, their insurance agent is the person they turn to for advice on flood insurance. But many insurance agents do not understand flood insurance either. Last month, Oregon became the fifth state in the country to try and improve insurance agent understanding about flood insurance by creating a flood-specific continuing education requirement. Read More

Flood Risk Beliefs and Coastal Home Prices

How does coastal flood risk impact home prices? The answer depends, in part, on how buyers and sellers perceive flood risk. In a recent NBER working paper, Laura Bakkensen and Lint Barrage examine the potential impact of heterogeneous beliefs about flood risk on housing market price dynamics, given a hypothetical increase in flood risk. Read More

Must Floodplain Buyouts Decrease Tax Revenue?

One frequent challenge is that local government officials are reluctant to offer post-disaster housing buyout programs because buyouts can result in lost property tax revenue: if residents relocate into other jurisdictions and properties are kept as vacant lots, tax revenue falls.  While the potential loss of tax revenue necessarily plays a major role in local ...Read More

Policy Incubator Receives Julio Castelo Matrán International Insurance Award

On June 14th, The Wharton Risk Center’s Policy Incubator received the Julio Castelo Matrán International Insurance Award from Fundación MAPFRE, a Madrid-based non-profit foundation committed to human well-being and social progress. Presented biennially, the €30,000 award recognizes projects that foster economic stability and solidarity through insurance and/or social protection. Read More

Regional Conservation as a Climate Adaptation Tool

St. Louis’ Great Rivers Greenway (GRG) District oversees planning and execution of a network of trails and open spaces designed to link rivers, parks, and communities throughout the St. Louis region. Although not established with climate adaptation as an objective, this approach to conservation, often targeted at riparian corridors, has created natural infrastructure that ...Read More

Residential Flood Insurance in Puerto Rico

Flood insurance in Puerto Rico has attracted media and policymaker attention since Hurricanes Irma and Maria devastated the island in late summer 2017. In a new issue brief, we examine recent trends in Puerto Rico’s residential flood market, documenting the flood insurance gap and examining the role of the private sector.  Read More

The Importance of Accurate Flood Hazard Maps and Risk-Based Premiums

In a recent study, the Risk Center’s Howard Kunreuther and Marilyn Montgomery calculate structure-specific, risk-based flood insurance premiums for nearly 12,000 North Carolina homes and compare them to current NFIP rates. Their findings underscore the importance of developing accurate flood hazard maps to price insurance effectively and communicate flood risk. Read More

Reauthorizing the National Flood Insurance Program

In undertaking the reauthorization of the NFIP, Congress should bear in mind two guiding principles for insurance.  In addition, with increased knowledge of consumer behavior, a behavioral risk audit provides strategies that will nudge and incentivize individuals to make decisions that will ultimately reduce their future flood-related losses. Read More

Federal Disaster Rebuilding Spending: A Look at the Numbers

Last year set records for natural disaster damages in the United States.  NOAA estimates total damages from the 2017 events were over $300 billion.  The U.S. experienced not one, not two, but three land falling hurricanes.  Hurricane Harvey set a record for rainfall.  The wildfires in California were some of the costliest the state has ...Read More

How Sea Level Rise Simulations Can Improve Climate Adaptation

Sea level rise threatens coastal communities around the world, but it is unclear if local governments and homeowners will be willing to invest in flood protection measures before it is too late. In a recent study, Co-Director Bob Meyer and colleagues explore the likely effects of sea level rise on South Florida’s adaptation efforts through ...Read More

The Cape Town Water Crisis: What Does the Future Hold?

SiriusXM Business Radio Powered by The Wharton School recently had a segment on the Cape Town water crisis.  Host Don Loney of the Knowledge@Wharton show discussed the current situation in Cape Town and what it tells us about the future of water in a changing climate with guests Carolyn Kousky of the Wharton Risk Center, Kevin ...Read More

Improving National Disaster Risk Management

Two goals should be at the top of our policy agenda: closing the disaster insurance gap and closing the risk reduction gap.  These gaps refer to the facts that many people do not have disaster insurance and much cost-effective risk reduction has not been undertaken. Read More

Revised Risk Assessments

2017 proved to be one of the costliest disaster years on record.  Total damages in the US for the year are estimated to exceed $300 billion.  Insured losses for all natural disasters in 2017 will total around $135 billion. Do events like these cause (re)insurers to update their risk assessments?  How do firms, consumers, and government ...Read More

Concentration of Policies in the NFIP

The National Flood Insurance Program (NFIP) is the predominant provider of flood insurance nationally.  Communities across the country can voluntarily join the program. In exchange for their residents being able to purchase federal flood policies, they must adopt minimum floodplain management regulations.  The program has grown since its founding in 1968 and now writes nearly ...Read More

Flood Insurance in 25 Countries

Flood insurance takes a variety of forms around the world. To complement ongoing discussions about flood insurance reform, the Wharton Risk Center developed an interactive flood insurance market e-platform as part of the Zurich Alliance to compare residential flood insurance markets in 25 countries. Read More

What Recent Hurricanes Mean for Flood Insurance in California

Three exceptional hurricanes—Harvey, Irma, and Maria— caused staggering damages from floods, winds, and storm surge in recent weeks. It’s likely they will make the record books as the most costly natural disasters in US history. Although California doesn’t get hurricanes, it does get large storms (called “atmospheric rivers”) that can be just as damaging to ...Read More

Legacy of Harvey and Irma Turns on FEMA’s Post-Disaster Response

Hurricane Harvey destroyed vital roads, public infrastructure, and hundreds of thousands of homes across Houston and southeast Texas. In Florida, Hurricane Irma has left communities reeling with widespread blackouts, severe coastal flooding, and crippled telecommunications systems. When floodwaters finally recede and the debris is cleared, recovery will be long. The Federal Emergency Management Agency (FEMA) will ...Read More

Look to Caribbean risk insurance model for US hurricane recovery

The first few days after a disaster, such as we have recently experienced with Hurricanes Harvey and Irma, are about emergency response: making sure people are safe, reuniting families, securing housing, filling necessities and restoring lifelines. But as days shift to weeks and then months and years, the slow process of rebuilding is undertaken. At ...Read More

The Challenges of Disaster Insurance

As Texas begins the long process of recovery from Hurricane Harvey, and Florida braces for a possible hit from Hurricane Irma, too few victims will have the financial support of insurance payouts. Insurance should be a critical component of disaster recovery. Federal disaster aid grants are surprisingly limited, often not more than a few thousand ...Read More

Flooding and the Economics of Risk Reduction

As the long process of recovery begins for a devastated Texas, it is time to start thinking about how rebuilding can increase the resilience of the flooded households and communities. Incorporating risk reduction measures into rebuilding can often be more cost-effective when done as part of the repair process, and it also provides an opportunity ...Read More