Catastrophic Risk Management

ICJ seeks to improve the complex system of public and private compensation for losses of life and property caused by natural disasters and terrorist attacks.

Disasters such as earthquakes, hurricanes, tsunamis, large-scale industrial accidents, and terrorist attacks kill thousands each year worldwide. In addition to the obvious human toll, disasters can have enormous economic consequences, destroying public and private infrastructure, disrupting government services, harming the environment, and reducing a populations' productivity and confidence.

Compensation for catastrophic losses of life and property comes from insurance companies, the court system, government compensation programs, philanthropic institutions, and business assistance to employees. It is a complex system and the balance of public and private compensation varies by the type of disaster and its magnitude.

This body of work offers analysis of the strengths and weakness of the current system in different contexts. It identifies who receives compensation, how it is allocated, who pays, and what incentives (and disincentives) are created by the system to mitigate risk. The research also describes how changing the balance between private and public sources of compensation would affect outcomes.