Multi-Year Index-Based Insurance for Adapting Water Utility Companies to Hydrological Drought: Case Study of a Water Supply System of the Sao Paulo Metropolitan Region, Brazil

Autor(es)

Guzman, Diego A. ^[1] ; Mohor, Guilherme S. ^[2] ; Mendiondo, Eduardo M. ^[3]

Afiliação do(s) autor(es)

^[1] Pontificia Bolivariana Univ, Dept Civil Engn, Bucaramanga 681007 - Colombia

^[2] Univ Potsdam, Inst Environm Sci & Geog, Karl Liebknecht Str 24-25, D-14476 Potsdam - Germany

^[3] Univ Sao Paulo, Sao Carlos Sch Engn, Dept Hydraul & Sanitat, BR-13566590 Sao Carlos, SP - Brazil

• Tipo de documento: Artigo Científico
• Fonte: WATER; v. 12, n. 11 NOV 2020.
• Citações Web of Science: 0

Resumo

The sustainability of water utility companies is threatened by non-stationary drivers, such as climate and anthropogenic changes. To cope with potential economic losses, instruments such as insurance are useful for planning scenarios and mitigating impacts, but data limitations and risk uncertainties affect premium estimation and, consequently, business sustainability. This research estimated the possible economic impacts of business interruption to the Sao Paulo Water Utility Company derived from hydrological drought and how this could be mitigated with an insurance scheme. Multi-year insurance (MYI) was proposed through a set of ``change{''} drivers: the climate driver, through forcing the water evaluation and planning system (WEAP) hydrological tool; the anthropogenic driver, through water demand projections; and the economic driver, associated with recent water price policies adopted by the utility company during water scarcity periods. In our study case, the evaluated indices showed that MYI contracts that cover only longer droughts, regardless of the magnitude, offer better financial performance than contracts that cover all events (in terms of drought duration). Moreover, through MYI contracts, we demonstrate solvency for the insurance fund in the long term and an annual average actuarially fair premium close to the total expected revenue reduction. (AU)

• Processo FAPESP: 14/50848-9 - INCT 2014: INCT para Mudanças Climáticas (INCT-MC)
• Beneficiário: Jose Antonio Marengo Orsini
• Modalidade de apoio: Auxílio à Pesquisa - Programa de Pesquisa sobre Mudanças Climáticas Globais - Temático
• Processo FAPESP: 14/15080-2 - Seguros hídricos como mecanismos de adaptação às mudanças do solo e do clima para otimizar a outorga do uso da água sob condições de transposição de vazões
• Beneficiário: Guilherme Samprogna Mohor
• Modalidade de apoio: Bolsas no Brasil - Mestrado