Probabilistic Assessment of Earthquake Disaster Occurrence in a Big City for Pricing Cat Bonds

Abstract eng:
As well known, pricing for earthquake insurance or CAT bonds, depends on the seismic risk in a city, in brief, the occurring probability of earthquake disaster. From a definition of the disaster, this probability can be derived from the probabilities of economic losses and casualties in a given future time period. A scenario earthquake approach is introduced for the risk analysis in this paper. The seismic hazard is characterized by some earthquakes with estimated pairs of magnitude and distance, the losses and casualties are calculated by means of GIS based information and decision-making support system, in which the vulnerability matrix of the building environment and the total property in the buildings are stored and organized well. As an example, a case study for a big city is presented. The result of occurring probability of earthquake disaster is compared with those from traditional method.

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