King's College London

Disasters—whether natural like hurricanes and earthquakes or man-made like pandemics—are becoming more frequent and severe, leaving individuals, businesses, and governments financially exposed.

Yet, our traditional system of disaster insurance is failing to keep pace with this growing crisis. As climate change and urbanisation make risks harder to predict and more expensive to cover, private insurers are withdrawing from high-risk areas, leaving a widening protection gap (the space between insured and uninsured losses). Governments, expected to step in, often struggle with slow responses and limited budgets, exacerbating economic instability and inequality.

In their book ‘Disaster Insurance Reimagined’, Paula Jarzabkowski, Konstantinos Chalkias, Eugenia Cacciatori, and Rebecca Bednarek explore how Protection Gap Entities (PGEs) are emerging as a new model to address this challenge.

PGEs blend government backing with private-sector expertise to provide insurance where the market fails, ensuring even high-risk communities have access to coverage. But for these hybrid models to succeed, disaster insurance must be reimagined—not as a reactive financial product, but as part of a broader system of resilience.

Their book argues for a shift toward proactive adaptation strategies, such as using insurance data to shape land-use policies, incorporating disaster mitigation incentives into premiums, and investing in infrastructure that reduces risk.

Ultimately, it calls for a fundamental rethink of how insurers, governments, and communities share responsibility for disaster preparedness in a world of escalating climate risks.

Insights from Professor Jarzabkowski’s talk 

Drawing on insights from her recent book, Disaster Insurance Reimagined, Professor Paula Jarzabkowski delivered a thought-provoking talk at our ‘Big’ Salon on Monday 3^rd March at the Centre for Sustainable Business.

Her discussion challenged many of the assumptions we hold about disaster insurance, exposing deeper issues in how our socio-economic system manages risk, responsibility, and fairness in the face of escalating climate crises.

Rethinking risk in society

One of the core takeaways from the talk was that disaster insurance is not just about covering financial losses—it reflects a broader way of thinking about risk in society. Right now, we operate within a system that looks backward, using historical data to assess risk and assign responsibility.

Insurance models price people out of coverage based on where they live, effectively punishing those in high-risk areas without questioning why they are vulnerable in the first place. This mirrors a wider issue in climate adaptation strategies, which are often treated as reactive fixes rather than proactive measures for resilience.

The question of responsibility 

Professor Jarzabkowski’s talk urged us to reconsider responsibility itself. The dominant approach frames risk as an individual problem—if your house floods, it’s because you chose to live in a flood-prone area, and the financial burden is yours to bear.

But what if we reimagined responsibility as a collective issue? After all, vulnerability to disaster is shaped by broader societal factors—such as urban planning, economic inequality, and political decisions about where and how we build. Instead of a system that assigns blame, we need one that redistributes responsibility in a way that acknowledges these structural realities.

How to quantify risk

Another critical issue raised was the increasing financialisation of climate risk. The assumption that risk can be neatly quantified and priced gives us a false sense of control. If something is measurable, it becomes manageable—but what about the risks that can’t be easily turned into numbers?

The market-driven approach to disaster insurance prioritises what is financially legible while overlooking the deeper, more complex threats posed by climate change. If we are serious about building resilience, we need to move beyond the narrow logic of quantification and risk pricing and embed justice, accountability, and shared responsibility into our adaptation strategies.

Final thoughts

Professor Jarzabkowski’s talk was a powerful reminder that disaster insurance is not just a technical issue—it is a reflection of the kind of society we want to build. If we continue to rely on an outdated model of individual responsibility and financial risk management, we will only deepen existing inequalities and leave many without protection. Instead, we need bold, systemic changes that rethink fairness, reimagine risk, and place collective responsibility at the heart of how we prepare for an uncertain future.

*

If you missed the talk, you can catch up on the recording on YouTube here:

This article was brought to you by the Centre for Sustainable Business. Find out more about their work here.