Urban Household Adaptive Capacity to Flooding in Accra: Analysis of Risk Transfer

Abstract

Floods occur naturally, however human activities are responsible for the damage and losses experienced after flood events. To reduce vulnerability, households and communities must adopt adaptive strategies that will help them cope with the impacts of climate-related natural hazards, and insurance can play a critical role in this regard. This study assessed the perceptions of urban households on flood insurance in Accra, ascertained determinant factors for flood insurance for vulnerable households in Accra and examined how flood insurance can enhance the adaptive capacity of vulnerable residents in Accra. The purpose of the research was to expose the gaps and barriers to flood risk management in relation to risk transfer in Ghana. Household questionnaire interviews (120) and in-depth interviews with local government officials and the head of an insurance company were drawn on to collect and analyze data within the study area. Findings from the study revealed that Accra's urban residents had a generally low awareness and comprehension of flood insurance. A sizable fraction of respondents either did not know flood insurance products existed or did not completely comprehend their advantages. In relation to the factors impacting households' decisions to get flood insurance, the degree of knowledge regarding flood hazards and the perception of the affordability of insurance rates emerged as the most important. The study emphasized how flood insurance might greatly improve the ability of households in Accra that are at risk of flooding to adapt, however, significant efforts are required to raise awareness, lower insurance premiums, and foster trust between consumers and insurance companies for this potential to be achieved. These findings indicate the need for interventions such as; increase in awareness and education, policy interventions to reduce insurance costs, strengthen trust between households and insurance service providers, promote risk reduction measures and improve access to flood risk information.