From Earthquake Geophysical Measures to Insurance Premium: A Generalised Method for the Evaluation of Seismic Risk, with Application to Italy’s Housing Stock

Cesari Riccardo and D’Aurizio Leandro ()
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Cesari Riccardo: IVASS, Via del Quirinale 21, Rome 00187, Italy
D’Aurizio Leandro: IVASS, Via del Quirinale 21, Rome 00187, Italy

Asia-Pacific Journal of Risk and Insurance, 2022, vol. 16, issue 2, 155-185

Abstract: Following the increasing necessity of quantitative measures for the impact of natural catastrophes, this paper proposes a new technique for a probabilistic assessment of seismic risk by using publicly available data on the earthquakes that have occurred in Italy. We implement an insurance-oriented methodology to produce a new map of the seismic risk and to evaluate, under various hypotheses, the costs of insuring all the Italian housing units against it. The model is compared with two main privately developed models, well known in the reinsurance industry, providing fairly similar results.

Keywords: earthquakes; seismic risk; exceedance loss; insurance pricing (search for similar items in EconPapers)
JEL-codes: G22 (search for similar items in EconPapers)
Date: 2022
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DOI: 10.1515/apjri-2020-0034

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