How fair is actuarially fair flood insurance pricing?

Insurance systems currently transfer flood risk from those exposed to those almost
certain not to face flooding. However, recent modelling has enabled pricing flood
insurance based on local risk. Hypothetically, insurers may abruptly switch from
a system where flood risk is mostly shared to one where dwellings at high risk
pay the bulk of total premiums. This paper investigates how this change would
affect people of various ethnicities, incomes, and material wellbeing in Aotearoa
New Zealand. We find that this adjustment would cause substantial premium
increases or loss of insurance for a small group and minor decreases for most. We
find that Māori and households with lower material wellbeing are more likely to
be significantly harmed by risk-based flood insurance.