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Encyclopedia of Earthquake Engineering pp 1184–1206Cite as

Insurance and Reinsurance Models for Earthquake

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Introduction

Building sustainable and resilient communities against extremely large earthquakes is a global and urgent problem in active seismic regions. A catastrophic earthquake and its cascading events, such as tsunami and fire, affect multiple structures and infrastructure simultaneously and have far-reaching economic impact across various sectors in a complex manner. Incurred seismic damage includes loss of life and limb, direct financial loss to building properties and lifeline facilities (capital stock), and indirect loss due to the ripple effects of the direct loss across regional and national economies. All these consequences are revealed in an abrupt reduction of gross domestic product (GDP) for national economy and of stock indices and prices for companies.

One of such devastating events was the 2011 Mw9.0 Tohoku earthquake in Japan among recent earthquake disasters around the world (e.g., 2004 Sumatra, 2008 Wenchuan, and 2010 Haiti earthquakes). For instance, a...

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Abbreviations

AEL:

Annual expected loss

ART:

Alternative risk transfer

CAT:

Catastrophe

CEA:

California Earthquake Authority

CNSF:

Comision Nacional de Seguros y Fianzas

CVaR:

Conditional value at risk

DRR:

Disaster risk reduction

EP:

Exceedance probability

EQC:

Earthquake Commission

GDP:

Gross domestic product

GP:

Generalized Pareto

HNDECI:

Hybrid Natural Disaster Economic Conversion Index

ICI:

Iceland Catastrophe Insurance

JERC:

Japan Earthquake Reinsurance Company

LP-HC:

Low-probability high-consequence

PML:

Probable maximum loss

POT:

Peak over threshold

SEL:

Scenario expected loss

SUL:

Scenario upper loss

TCIP:

Turkish Catastrophe Insurance Pool

TREIF:

Taiwan Residential Earthquake Insurance Fund

VaR:

Value at risk

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Author information

Authors and Affiliations

  1. Department of Civil Engineering, University of Bristol, Bristol, UK

    Katsuichiro Goda

  2. Geophysical Institute, Karlsruhe Institute of Technology, Hertzstraße 16, 76187, Karlsruhe, Germany

    Friedemann Wenzel & James Edward Daniell

Authors
  1. Katsuichiro Goda
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  2. Friedemann Wenzel
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  3. James Edward Daniell
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Corresponding author

Correspondence to Katsuichiro Goda .

Editor information

Editors and Affiliations

  1. Institute for Computer Science in Civil Engineering, Gottfried Wilhelm Leibniz, University Hannover, Hannover, Germany

    Michael Beer

  2. Department of Civil Engineering & Engineering Mechanics, Columbia University, New York, NY, USA

    Ioannis A. Kougioumtzoglou

  3. Institute for Risk & Uncertainty and Centre for Engineering Sustainability, Liverpool, UK

    Edoardo Patelli

  4. Institute for Risk & Uncertainty and Centre for Engineering Dynamics, Liverpool, UK

    Siu-Kui Au

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Goda, K., Wenzel, F., Daniell, J.E. (2015). Insurance and Reinsurance Models for Earthquake. In: Beer, M., Kougioumtzoglou, I.A., Patelli, E., Au, SK. (eds) Encyclopedia of Earthquake Engineering. Springer, Berlin, Heidelberg. https://doi.org/10.1007/978-3-642-35344-4_261

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