Howard Kunreuther

Risk Management and Decision Processes Center, Wharton School
kunreuther@wharton.upenn.edu
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Howard Kunreuther is the James G. Dinan Professor of Decision Sciences, Business and Public Policy at the Wharton School, and Co-Director of the Wharton Risk Management and Decision Processes Center. He has a long-standing interest in ways that society can better manage low-probability/high-consequence events related to technological and natural hazards

Dr. Kunreuther serves on the World Economic Forum’s Global Agenda Council on Insurance and Asset Management 2011-2012, and the Intergovernmental Panel on Climate Change (IPCC) as a lead chapter author of the IPCC’s 5th Assessment Report on Integrated Risk and Uncertainty Assessment of Climate Change Response. He is a Fellow of the American Association for the Advancement of Science (AAAS) and a Distinguished Fellow of the Society for Risk Analysis, receiving the Society’s Distinguished Achievement Award in 2001. He is the recipient of the Elizur Wright Award for the publication that makes the most significant contribution to the literature of insurance. His book At War with the Weather: Managing Large-Scale Risks in a New Era of Catastrophes, (with Erwann Michel-Kerjan, MIT Press, 2009, 2011) was awarded the 2011 Kulp-Wright Award for the most influential text published on the economics of risk management and insurance.

Dr. Kunreuther’s CRED projects include:

Insuring Climate Catastrophes in Florida: An Analysis of Insurance Pricing and Capacity under Various Scenarios of Climate Change and Adaptation Measures: This project examines the insurance premiums that private insurers are likely to charge and their ability to cover losses against hurricane risk in Florida as a function of projections on future hurricanes, (b) market conditions, (c) availability of reinsurance, and (d) adoption of adaptation measures.

Demand for Multi-Year Insurance: Experimental Evidence: The dual problem of volatility of insurance premiums and homeowners’ failure to properly insure against future damage from disasters suggests that the design of insurance contracts be modified from one-year contracts to multi-year policies. Insurance is currently sold as a one-year contract, which creates unnecessary volatility and might also be the reason why many individuals let their insurance policy lapse very quickly. Controlled experiments suggest that if insurers offer a multi-year policy with stable premiums there will be considerable interest by individuals in purchasing this coverage.