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A Systems Approach to Modeling Catastrophic Risk and Insurability

Author

Listed:
  • A. Amendola
  • Y. Ermoliev
  • T. Ermolieva
  • V. Gitis
  • G. Koff
  • J. Linnerooth-Bayer

Abstract

This paper describes a spatial-dynamic,stochastic optimization model that takes account ofthe complexities and dependencies of catastrophicrisks. Following a description of the general model,the paper briefly discusses a case study of earthquakerisk in the Irkutsk region of Russia. For this purposethe risk management model is customized to explicitlyincorporate the geological characteristics of theregion, as well as the seismic hazards and thevulnerability of the built environment. In its generalform, the model can analyze the interplay betweeninvestment in mitigation and risk-sharing measures. Inthe application described in this paper, the modelgenerates insurance strategies that are lessvulnerable to insolvency. Copyright Kluwer Academic Publishers 2000

Suggested Citation

  • A. Amendola & Y. Ermoliev & T. Ermolieva & V. Gitis & G. Koff & J. Linnerooth-Bayer, 2000. "A Systems Approach to Modeling Catastrophic Risk and Insurability," Natural Hazards: Journal of the International Society for the Prevention and Mitigation of Natural Hazards, Springer;International Society for the Prevention and Mitigation of Natural Hazards, vol. 21(2), pages 381-393, May.
    • Handle: RePEc:spr:nathaz:v:21:y:2000:i:2:p:381-393
    DOI: 10.1023/A:1008183011971
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    References listed on IDEAS

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    1. T.Y. Ermolieva, 1997. "The Design of Optimal Insurance Decisions in the Presence of Catastrophic Risks," Working Papers ir97068, International Institute for Applied Systems Analysis.
    2. T.Y. Ermolieva & Y.M. Ermoliev & V.I. Norkin, 1997. "Spatial Stochastic Model for Optimization Capacity of Insurance Networks Under Dependent Catastrophic Risks: Numerical Experiments," Working Papers ir97028, International Institute for Applied Systems Analysis.
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    Citations

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    Cited by:

    1. Perez-Maqueo, O. & Intralawan, A. & Martinez, M.L., 2007. "Coastal disasters from the perspective of ecological economics," Ecological Economics, Elsevier, vol. 63(2-3), pages 273-284, August.
    2. Pantea Vaziri & Rachel Davidson & Linda Nozick & Mahmood Hosseini, 2010. "Resource allocation for regional earthquake risk mitigation: a case study of Tehran, Iran," Natural Hazards: Journal of the International Society for the Prevention and Mitigation of Natural Hazards, Springer;International Society for the Prevention and Mitigation of Natural Hazards, vol. 53(3), pages 527-546, June.
    3. Tatiana Ermolieva & Yuri Ermoliev & Guenther Fischer & Istvan Galambos, 2003. "The Role of Financial Instruments in Integrated Catastrophic Flood Management," Multinational Finance Journal, Multinational Finance Journal, vol. 7(3-4), pages 207-230, September.
    4. Lianfa Li & Jinfeng Wang & Hareton Leung & Sisi Zhao, 2012. "A Bayesian Method to Mine Spatial Data Sets to Evaluate the Vulnerability of Human Beings to Catastrophic Risk," Risk Analysis, John Wiley & Sons, vol. 32(6), pages 1072-1092, June.
    5. Yohannes Kesete & Jiazhen Peng & Yang Gao & Xiaojun Shan & Rachel A. Davidson & Linda K. Nozick & Jamie Kruse, 2014. "Modeling Insurer‐Homeowner Interactions in Managing Natural Disaster Risk," Risk Analysis, John Wiley & Sons, vol. 34(6), pages 1040-1055, June.
    6. Valente, Donatella & Miglietta, Pier Paolo & Porrini, Donatella & Pasimeni, Maria Rita & Zurlini, Giovanni & Petrosillo, Irene, 2019. "A first analysis on the need to integrate ecological aspects into financial insurance," Ecological Modelling, Elsevier, vol. 392(C), pages 117-127.
    7. Jianxiu Wang & Xueying Gu & Tianrong Huang, 2013. "Using Bayesian networks in analyzing powerful earthquake disaster chains," Natural Hazards: Journal of the International Society for the Prevention and Mitigation of Natural Hazards, Springer;International Society for the Prevention and Mitigation of Natural Hazards, vol. 68(2), pages 509-527, September.

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