Based on Shiller’s writings on the use of insurance as a device to reduce losses from tsunami type events, LIRNEasia has been looking at insurance as a part of the solution. However, the story below suggests that insurance is on the retreat in Shiller’s backyard, in the face of predictions of more violent storms. In contrast, the following posters, promising “on-the-spot” insurance payments for earthquakes and tsunamis came up on the streets of Colombo, shortly after the September 12th, 2007 false warning: Home Insurers Canceling in East Over Storm Fears – New York Times It is 1,200 miles from the coastline where Hurricane Katrina touched land two years ago to the neat colonial-style home here where James Gray, a retired public relations consultant, and his wife, Ann, live. But this summer, Katrina reached them, too, in the form of a cancellation letter from their home-insurance company. The letter said that “hurricane events over the past two years” had forced the company to limit its exposure to further losses; and that because the Grays’ home on Long Island was near the Atlantic Ocean — it is 12 miles from the coast and has been touched by rampaging waters only once, when […]