Urban Flood Loss Assessment and Index Insurance Compensation Estimation by Integrating Remote Sensing and Rainfall Multi-Source Data: A Case Study of the 2021 Henan Rainstorm

Zhixia Wu, Xiazhong Zheng, Yijun Chen, Shan Huang, Wenli Hu and Chenfei Duan ()
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Zhixia Wu: College of Hydraulic & Environmental Engineering, China Three Gorges University, Yichang 443002, China
Xiazhong Zheng: College of Hydraulic & Environmental Engineering, China Three Gorges University, Yichang 443002, China
Yijun Chen: College of Management, Sichuan University of Science & Engineering, Zigong 643000, China
Shan Huang: Municipal Construction Engineering Center of Cuiping District, Yibin 644000, China
Wenli Hu: College of Management, Sichuan University of Science & Engineering, Zigong 643000, China
Chenfei Duan: College of Hydraulic & Environmental Engineering, China Three Gorges University, Yichang 443002, China

Sustainability, 2023, vol. 15, issue 15, 1-18

Abstract: To address the problems of traditional insurance compensation methods for flood losses, such as difficulty in determining losses, poor timeliness, a complicated compensation process and moral hazard, an urban flood index insurance tiered compensation model integrating remote sensing and rainfall multi-source data was proposed. This paper first extracted the area of water bodies using the Normalized Difference Water Index and estimates the urban flood area loss based on the flood loss model of remote sensing pixels. Second, the tiered compensation mechanism triggered by rainfall was determined, and the urban flood index insurance tiered compensation model was constructed using remote sensing and rainfall multi-source data. Finally, the economic losses and flood insurance compensation in urban flood were estimated. The results show that: (1) the geo-spatial distribution of flood-affected areas by remote sensing inversion is consistent with the actual rainfall characteristics of Henan Province, China; (2) based on the flood losses model of remote sensing pixels, the estimated flood losses for Henan Province are CNY 110.20 billion, which is consistent with the official data (accuracy ≥ 90%); and (3) the proposed model has good accuracy (R 2 = 0.98, F = 1379.42, p < 0.05). The flood index insurance compensation in Henan Province is classified as a three-tier payout, with a total compensation of CNY 24,137 million. This paper can provide a new approach to estimate large-scale urban flood losses and the scientific design of flood index insurance products. It can also provide theoretical and technical support to many countries around the world, particularly those with underdeveloped flood insurance systems.

Keywords: flood index insurance; multi-source data; insurance compensation; trigger mechanism; UFITIC model (search for similar items in EconPapers)
JEL-codes: O13 Q Q0 Q2 Q3 Q5 Q56 (search for similar items in EconPapers)
Date: 2023
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