Campus Only Senior Thesis
Bachelor of Arts
© 2013 Tiffany Kindred
This thesis analyzes the interplay between natural disasters, human behavior, and insurance markets. Prospect theory can help us understand how fundamental behavioral biases in human nature affect insurance purchases and can begin to explain previously exhibited irrational behavior in regards to earthquake insurance. The Great East Japan Earthquake presents a useful case study to examine the performance of Japanese residential earthquake insurance in light of a devastating major catastrophe. Analysis suggests that prospect theory can explain low earthquake insurance penetration rates, and that insurance policies can be improved by taking into account behavioral biases. Examination of the disaster insurance market highlights the debate of government intervention, and brings into question long-term sustainability of the private insurance market.
Kindred, Tiffany, "How Do Insurance Markets Respond to Natural Disasters?" (2013). Scripps Senior Theses. 264.
This thesis is restricted to the Claremont Colleges current faculty, students, and staff.