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Haris Ur Rehman Horani, Muhammad Amin, Farhan Ahmed: Climate Risk Insurance: Bibliometric Review on
Present, Past and Future

The landscape of risk assessment methodologies in the context of climate insurance
has evolved significantly. Traditional risk assessments have transitioned towards
addressing systemic complexity, deep uncertainty, and multi-hazard risks
(Meynadier, R.; Rakotoarimanga, H.; Frobert, B.; Weisman, A.; Lobligeois, F.;
Deroche, M.S. (2023); Zscheischler, J.; Westra, S.(2023)). This evolution involves
considering the physical hazard, exposure, and vulnerability components of climate
risk, along with the development of Natural Hazard models for estimating damages
and losses. New approaches include global proportional models for large-scale risk
assessment and more sophisticated local-scale assessments integrating forward-
looking scenarios. The incorporation of diverse lines of evidence, stakeholder
engagement, participatory processes, and the integration of quantitative and
qualitative information have become crucial in enhancing the resilience of climate-
sensitive systems. These advancements aim to provide a more comprehensive and
accurate approach to climate risk management and insurance pricing. Furthermore,
there is a growing awareness of the limitations, uncertainties, and trade-offs inherent
in data, models, and methods for financial risk assessments related to climate change,
urging for a more comprehensive scenario taxonomy to navigate financial risks under
uncertainty. This evolution highlights the necessity of integrating diverse lines of
evidence and expertise, enhancing inter-disciplinarily, and encouraging inclusiveness
in climate risk assessment practices. Moreover, some suggested methodologies related
to RQ1 are recommended below:
1. How do advancements in artificial intelligence and big data enhance the
accuracy of risk prediction model for climate change?
2. How can policy makers and regulatory make frameworks to decrease the
barriers in climate risk insurance markets?
3. Identifying the behavior change and adaptation of individuals and
organizations towards climate change and insurance uptake?
RQ3) What are the key challenges and opportunities in leveraging climate insurance
to mitigate risks associated with climate change?
Climate change poses significant challenges to communities worldwide, increase in
the frequency and austerity of weather and other climate-related risks. The concept of
climate risk insurance has emerged as a tool for mitigating the financial impacts of
risky climate related events. The key challenges and opportunities associated with
leveraging climate insurance to address climate change risks, by examining data
uncertainty, affordability concerns, moral hazard, coverage gaps, and policy
complexities, alongside opportunities for innovation, public-private partnerships, risk
reduction incentives, technological advancements, and policy integration.

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