Consequences of financial vulnerability and insurance loading for the affordability of earthquake insurance systems: evidence from Iran

Pakdel-Lahiji, N., Hochrainer-Stigler, S., Ghafori-Ashtiany, M., & Sadeghi, M. (2015). Consequences of financial vulnerability and insurance loading for the affordability of earthquake insurance systems: evidence from Iran. The Geneva Papers on Risk and Insurance 40 (2) 295-315. 10.1057/gpp.2014.35.

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Abstract

Many governments provide financial assistance for reconstruction of damaged housing units after a disaster in order to prevent vulnerable households from falling into poverty traps or entering low growth cycles. To lessen these risks and the overall financial burden on the public sector after extreme events, private insurance schemes provide one viable solution. In this paper, the possible effects of such solutions are assessed for District 1 of Shiraz, Iran, based on recent probabilistic earthquake risk modelling. The work explicitly focuses on the financial vulnerability of different household groups as well as possible increases in premiums due to uncertainties in the underlying risk model through the use of loading factors. The results are compared with current non-probabilistic-based premiums that are used by most insurance companies in Iran, and recommendations are given as to which schemes may fit best or could be affordable for society to manage future earthquake risks.

Item Type:	Article
Research Programs:	Risk, Policy and Vulnerability (RPV) Young Scientists Summer Program (YSSP) Risk & Resilience (RISK)
Bibliographic Reference:	The Geneva Papers on Risk and Insurance; 40(2):295-315 (April 2015) (Published online 4 February 2015)
Depositing User:	IIASA Import
Date Deposited:	15 Jan 2016 08:53
Last Modified:	27 Aug 2021 17:39
URI:	https://pure.iiasa.ac.at/11479

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