Wharton PPI publishes Issue Briefs tackling concerns that are varied but share one common thread: they are central to the economic health of the nation and the American people. These are nonpartisan, knowledge-driven documents written by Wharton and Penn faculty in their specific areas of expertise.
PublicationOptions Facing Congress in Renewing the Terrorism Risk Insurance Act(2014-07-01) Kunreuther, Howard; Michel-Kerjan, Erwann; Kunreuther, Howard; Michel-Kerjan, ErwannThe Terrorism Risk Insurance Act (TRIA) is set to expire at the end of 2014 and is currently under debate in Congress. Renewing TRIA may limit the amount of disaster relief the federal government would contribute after a terrorist attack, but the different options under which TRIA might be renewed carry implications for how losses from any attack would be spread between commercial policyholders, insurers, and taxpayers. PublicationPolicy Options for Improving the Resilience of US Transportation Infrastructure(2018-07-16) Tonn, Gina; Czajkowski, Jeffrey; Tonn, Gina; Czajkowski, Jeffrey; Kunreuther, HowardDespite the vulnerability of America’s aging infrastructure to costly disruptions from man-made and natural disasters, infrastructure insurance under-utilized. On average, only 30% of catastrophic losses in the past 10 years have been covered by insurance. Most infrastructure project managers have relied instead on taxpayer-funded federal aid when disaster strikes. But it doesn’t need to be this way. In this brief, Gina Tonn, Jeffrey Czajkowski, and Howard Kunreuther use technical reports and input from infrastructure managers to outline steps that policymakers can take to help maximize the use of infrastructure insurance for providing financial protection, encouraging investment in loss mitigation measures, and limiting the current reliance on taxpayer dollars. PublicationInsurance against Extreme Events: Pairing Short-Term Incentives with Long-Term Strategies(2016-10-01) Kunreuther, Howard; Kunreuther, HowardConsumers tend to purchase too little insurance or purchase it too late. Consequently, taxpayers wind up bearing substantial burdens for paying reconstruction costs from extreme events. The 2005 and 2012 hurricane seasons alone cost taxpayers nearly $150 billion. There is much that can be done to better facilitate the role that insurance can play in addressing losses from extreme events, both natural and man-made. PublicationImplementing the National Flood Insurance Reform Act in a New Era of Catastrophes(2013-10-01) Kunreuther, Howard; Michel-Kerjan, Erwann; Kunreuther, Howard; Michel-Kerjan, ErwannThe United States has entered a new era of catastrophes, of which floods have been the most devastating. Through its 2012 reform (Biggert-Waters Act), the 45-year old federally-run National Flood Insurance Program has an opportunity to highlight the role that risk-based premiums can play in encouraging individuals to undertake loss reduction measures. But the implementation of this reform is now being challenged due to concerns that residents cannot afford risk-based premiums. The authors of this brief propose that this can be overcome by successfully combining risk-based pricing, required insurance, means-tested insurance vouchers, and mitigation loans, so that individuals reduce their flood risk and are financially protected against future disaster losses, thus reducing the need for taxpayer money for disaster relief in the future.