An integrated market flood risk insurance framework for urban households in South Africa

Flood risk in South Africa remains a problem due to climate change, rapid urbanisation and persistent disparities in the region and low-income urban households are disproportionately impacted because of poor access to affordable flood insurance. This paper constructs the Integrated Market Flood Risk Insurance Framework (IMFRIF) based on a qualitative, desk-based research design consisting of contextual policy analysis, systematic literature review and analytical synthesis through systems thinking. The policy and document analysis reviewed the legislation on national disaster management, insurance and industry reports to determine institutional and market limitations on the provision of flood insurance. A PRISMA-ScR systematic literature review filtered 312 records on Scopus, Web of Science, and Google Scholar, which led to the identification of 47 peer-reviewed articles and 15 policy and comparative case studies. Thematic analysis led to the identification of six prevailing clusters of barriers based on the influence on insurance uptake, which included affordability and product design, trust and risk perception, data and risk assessment gaps, regulatory capacity, multi-stakeholder coordination, and community engagement. The results of these studies were used to design the IMFRIF, a system incorporating 9 major stakeholder groups and 5 interdependent system components into a single market-based design. The framework provides a systematic foundation to the resolution of systemic exclusion of flood insurance, but specifically acknowledges the implementation limitations regarding data availability, regulation capacity, fiscal sustainability and communal level of trust. The IMFRIF is placed as a progressive and responsive system that offers a point of future empirical confirmation and policy implementation to promote inclusive disaster risk financing in South Africa and comparable low- and middle-income contexts.