Original Research

Natural hazard insurance demand: A systematic review

Farai B. Mushonga, Syden Mishi
Jàmbá: Journal of Disaster Risk Studies | Vol 14, No 1 | a1223 | DOI: https://doi.org/10.4102/jamba.v14i1.1223 | © 2022 Farai B. Mushonga, Syden Mishi | This work is licensed under CC Attribution 4.0
Submitted: 23 September 2021 | Published: 27 May 2022

About the author(s)

Farai B. Mushonga, Department of Economics, Faculty of Business and Economic Sciences, Nelson Mandela University, Gqeberha, South Africa
Syden Mishi, Department of Economics, Faculty of Business and Economic Sciences, Nelson Mandela University, Gqeberha, South Africa


The mitigation of natural hazard costs such as loss of property, life, crops and medical costs can be achieved through the adoption of insurance. It is, however, not clear whether there is corresponding demand for insurance given the increasing frequency and veracity of natural hazards, especially in South Africa. This study follows the guideline of Preferred Reporting items for Systematic Review and Meta-analysis Protocols (PRISMA-P) to identify the relevant works on the subject. A total of 645 articles emerged on initial search and after screening, 39 remained which have been reviewed in this study. Reviewing the studies and conflating with the study objectives, the following themes emerged for discussion on demand for natural hazard insurance, is there demand for natural hazard insurance?;psychology of decision-making; risk perception; risk preference and willingness to pay. The study found that studies of demand for insurance have identified that there is low demand for tailor-made insurance products for natural hazards. Further analysis of the demand revealed that normative and descriptive decision-making of buying natural hazard insurance is part of the psychological factors that determine demand. Whilst risk preference and perception have sub-attributes that affect their impact on demand such as experience, age and salience to natural hazards in communities. Whilst willingness to pay is also a broad concept which is analysed using both monetary and non-monetary factors in literature, the results also identified that there is a huge gap in literature in terms of studies that cover risk preference and perception in Africa and in the Southern African Development Community (SADC) region.


natural hazard insurance demand; psychological effect; willingness to pay; risk preference; risk perception


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