Environmental insurance analysis from an economic approach

Abstract

The aim of this research work is to propose which features in environmental insurance provide the best incentives to agents, so that they shall take actions towards promoting good care practices for the environment as well as for natural resources. In the second section of this work, a model, based on information theory, is introduced in order to study the behavior of agents when faced with incentives provided by environmental insurance policies. Then, an empirical analysis,describing the regulations in force and the current situation of environmental insurance for a particular case, i.e.,Argentina, is shown. Finally, the features, emerging from the theoretical model, are confronted with those observed in the market. Results suggest that there is a great similarity in how some concepts are dealt with, while, in others, there are substantial differences. Consequently, policy proposals can be made to improve the situation in this matter.