Events Calendar

CREATE Seminar Series -

Speaker: Howard Kunreuther, Professor of Decision Sciences and Business and Public Policy at the Wharton School

Talk Title:

Series: CREATE Monthly Seminar Series

Abstract: To address the dual problem of volatility of insurance premiums in the aftermath of a catastrophe and homeowners’ failure to properly insure against future damage from disasters, we have recently proposed the introduction of multi-year insurance (MYI) to complement standard annual policies. This talk reports on the findings of a web-based experiment undertaken with real money to determine the demand for MYI using a representative sample of approximately 500 adult subjects in the United States. We find that the demand for MYI is very significant. When insurance is actuarially priced, a majority of individuals favor this type of contract over annual policies. The demand for MYI remains quite high even when it is priced 5 percent and 10 percent above the actuarially fair price. The talk concludes by discussing the role that MYI policies can play in reducing losses from catastrophic risk.

Biography: Howard C. Kunreuther is the James G. Dinan Professor; Professor of Decision Sciences and Business and Public Policy at the Wharton School, and co-director of the Wharton Risk Management and Decision Processes Center. He has a long-standing interest in ways that society can better manage low-probability, high-consequence events related to technological and natural hazards. Dr. Kunreuther is a member of the World Economic Forum’s Global Agenda Council on Insurance and Asset Management for 2011-2012, and in 2009-2010 served as co-chair of the Forum’s Global Agenda Council on Leadership and Innovation for Reducing Risks from Natural Disasters. He currently serves the Intergovernmental Panel on Climate Change (IPCC) as a chapter lead author of the IPCC’s 5th Assessment Report on Integrated Risk and Uncertainty Assessment of Climate Change Response. He is a Fellow of the American Association for the Advancement of Science, and a Distinguished Fellow of the Society for Risk Analysis, receiving the Society’s Distinguished Achievement Award in 2001. His most recent books are At War with the Weather (with E. Michel-Kerjan) (2009, paperback, 2011), winner of the Kulp-Wright Book Award from the American Risk and Insurance Association in 2011; Learning from Catastrophes: Strategies for Reaction and Response (with M. Useem) (2010); and Insurance and Behavioral Economics: Improving Decisions in the Most Misunderstood Industry”(with Mark Pauly and Stacey McMorrow) (forthcoming 2012).

Please RSVP to calicchi@usc.edu by 5/21/12

Host: Homeland Security Center @ USC (CREATE)

Location: Ronald Tutor Hall of Engineering (RTH) - 306

Audiences: Everyone Is Invited

Contact: Erin Calicchio