Policy Incubator Project by Wharton Risk Management and Decision Processes Center at Pennsylvania University (USA )


In a country like the United States, accustomed to hurricanes, floods and other natural disasters, for many families the true cataclysmic impact hits them after these devastating natural phenomena have passed through, when the time comes for reconstruction and recovery. The fact is that a lack of financial resources prevents thousands of people having access to insurance that can cover them against the effects of such contingencies.

The proposed solution to this problem is the goal of the project that won this year’s Julio Castelo Matrán International Insurance Award, which recognizes those entities which help extend the insurance activity and foster economic stability. A year ago, the researcher Carolyn Kousky and her colleagues at the center launched this initiative with the aim of providing real solutions to insurance-related issues in order to help communities at greatest risk of natural disasters mitigate their effects.

How did the project come about?

Policy Incubator stemmed from the frustration of a group of researchers, as we saw how the initiatives and many of the public policies related to covering natural disasters were totally ineffective and didn’t do enough to improve the lives of the people on the ground. That’s why we had the idea of creating a public policy incubator that could resemble a business incubator; but, instead of entrepreneurial projects, we focus on identifying new policies and innovative ideas that can help families recover following a natural disaster.

How can your organization improve people’s lives?

We carry out a series of activities that seek to integrate research and practice. We work with local governments to better design their policies and provide insurance that covers disasters or catastrophes to people who could otherwise not afford it. We also seek to develop new ways of generating resources to help victims of a natural disaster recover more fully. We also work at the federal level with the United States government to implement better legislation in this area and, in general, to achieve more effective, adequate solutions to prepare for this kind of emergency.

Your projects involve many people

One of the major challenges facing us is how to work with individuals and organizations from such a wide range of areas. Our interlocutors include representatives from the local, federal or state administrations, the private sector and researchers from a variety of disciplines. And, often, there is no communication between them. In such cases, what we strive to do is to bring all these parties together in the same room and try to get them to reach agreements. However, it’s not always easy to make so many bridges.

Can you name a project you are particularly proud of?

In the United States, floods are one of the worst disasters that can happen, and there are many families who are not insured against these situations. Public aid is insufficient for low-income families. That’s why we are designing a program at the federal level to help these people with limited resources have insurance cover. Also, at a more local level, there is an innovative initiative in Portland to try to reduce the cost of flood insurance policies.

What new projects are you working on?

Precisely at this moment in time we are starting to work with coastal communities to help them adapt to climate change. The project works on the basis of understanding the new storm patterns and rising sea levels. In parallel, we are seeking a change in the current legislation on the ground to help preserve the economy and ecological systems of these coastal areas, and ensure that these populations can continue living in safe conditions.

What would have to happen for a project such as “Policy Incubator” to no longer prove necessary in the future?

I’m afraid there’s a long way still to go. Right now we are trying to close three gaps we have identified. Firstly, there’s the insurance gap: those people who don’t have insurance to cope with these disasters. Secondly, there’s the prevention gap: many people who have not taken steps to reduce their risks. And, finally, the climate gap: in order to cope not only with present-day disasters, but also those of the future. If we can succeed on these three fronts, that would be incredible.