NYC - Building Resilience for Low-Income New Yorkers Post-Disaster
A project to improve the ability of low- and moderate-income households to recover after a flood through innovative insurance pilots and capacity building within the city, and civic partners to harness risk-transfer markets for social goals.
In this installment of the CIVIC Stage 2 Innovation of the Month series, we highlight a project called “Inclusive Insurance: Improving the Post-Flood Financial Resiliency of Low- and Moderate-Income Households” from New York City. The project seeks to improve the ability of low- and moderate-income households to recover after a flood through innovative insurance pilots and capacity building within the city, and civic partners to harness risk-transfer markets for social goals.
MetroLab’s Elias Gbadamosi and Josh Schacht spoke with Carolyn Kousky, executive director of the Wharton Risk Management and Decision Processes Center at the University of Pennsylvania; Peter Adams, senior policy adviser for Land Use and Buildings, New York City Mayor’s Office of Recovery and Resiliency; Helen Wiley, project manager at the Wharton Risk Center; Joseph Sant, general counsel and vice president of the Center for NYC Neighborhoods; Jessi Penkoff, staff attorney at the Center for NYC Neighborhoods; and Aaron Sturm, program manager at the Center for NYC Neighborhoods.
Elias Gbadamosi: Can you tell us what your project is about and what the motivation for it was?
Carolyn Kousky: Our project’s overarching goal is to increase the financial resilience of low- and moderate-income (LMI) households in New York City to escalating flood risk through the use of inclusive insurance. Currently, low- and moderate-income households in the U.S. struggle with access to the needed financial resources to recover after disaster events. Yet, financial resilience — the ability to recover from an economic shock — underpins other aspects of recovery and is a necessary condition for broader urban disaster resilience.
Peter Adams: Our project is about helping the neediest when they need help most. After a disaster, lower income New Yorkers often don’t have the savings or support network necessary to find safe shelter, get food and access needed supplies. Even though all levels of government and aid organizations scramble to start up response and recovery actions after a flood, vulnerable households have needs that cannot wait. That’s why we are piloting a parametric insurance policy program in New York City, to test and demonstrate how this type of speedy, ready-to-go insurance payout can get money to the people who need it most in the immediate aftermath of a disaster.
Kousky: We have structured our project activities into four components: (1) develop and deploy innovative insurance pilots, (2) create a community of practice for harnessing risk transfer for social recovery goals, (3) increase literacy and capacity of all partners, and (4) link research to actionable change. As Peter said, the key pilot will be the purchase, by the Center for New York City Neighborhoods, of a parametric flood insurance policy designed to rapidly provide emergency cash grants to low- and moderate-income households in the event of a flood.
Josh Schacht: Who are your project partners and what role do they play on the team?
Helen Wiley: This project is a joint effort between the Wharton Risk Management and Decision Processes Center at the University of Pennsylvania, the New York City Mayor’s Office of Climate Resiliency (MOCR), and the Center for New York City Neighborhoods (CNYCN). These partners have deep and extensive experience on topics of disaster resilience, insurance, and the recovery of low- and moderate-income households and communities from disasters. As a team, our three institutions are working closely together to ensure that all of our project components enhance one another. For instance, CNYCN coordinates a network of 30 housing counseling and legal services organizations that assist low- and moderate-income households in NYC. This network was activated during Hurricane Sandy to help households with recovery. Our project will provide this network of advisers with deeper training on disaster insurance and disaster finance.
Additionally, Guy Carpenter, one of the largest global reinsurance intermediaries with broad experience in disaster risk transfer, is providing consultant and brokerage services for the insurance purchase. They are helping design and structure this innovative insurance policy. The Risk Center is also undertaking research and development on a second promising parametric insurance model with the help of Global Parametrics, world leaders in inclusive insurance for poorer populations internationally. Our work also is informed by an advisory board of subject-matter experts.