Impact of Spatial Scale and Building Exposure Distribution on Earthquake Insurance Rates: A Case Study in Tangshan, China

Pan Zhang; Xiaojun Li; Chen Liu

doi:10.1007/s13753-023-00471-4

Volume 14 Issue 1

Mar. 2023

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Pan Zhang, Xiaojun Li, Chen Liu. Impact of Spatial Scale and Building Exposure Distribution on Earthquake Insurance Rates: A Case Study in Tangshan, China[J]. International Journal of Disaster Risk Science, 2023, 14(1): 64-78. doi: 10.1007/s13753-023-00471-4

Citation:

Pan Zhang, Xiaojun Li, Chen Liu. Impact of Spatial Scale and Building Exposure Distribution on Earthquake Insurance Rates: A Case Study in Tangshan, China[J]. International Journal of Disaster Risk Science, 2023, 14(1): 64-78. doi: 10.1007/s13753-023-00471-4

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Impact of Spatial Scale and Building Exposure Distribution on Earthquake Insurance Rates: A Case Study in Tangshan, China

doi: 10.1007/s13753-023-00471-4

Pan Zhang¹,
Xiaojun Li^{2,3
,
,},
Chen Liu⁴

1. Institute of Geophysics, China Earthquake Administration, Beijing, 100081, China;
2. Key Laboratory of Urban Security and Disaster Engineering of China Ministry of Education, Beijing University of Technology, Beijing, 100124, China;
3. Institute of Disaster Prevention, Sanhe, 065201, China;
4. China Re Catastrophe Risk Management Company Ltd., Beijing, 100033, China

Funds:

This research was funded by the National Key Research and Development Program (2022YFC3003500) and the 111 Project (D21001).

Accepted Date: 2023-01-21
Publish Date: 2023-02-15

Abstract

Abstract

In order to examine the effect of spatial scale and building exposure distribution on the pure rate of earthquake catastrophe insurance, this study described three modules for rate determination, put forward the general assumptions and principles for calculating the pure insurance rate, and introduced three types of building distribution and their calculation. Taking Tangshan City of Hebei Province in China as an example, we analyzed the pure rate of regional earthquake insurance in terms of spatial scale and building exposure distribution by using the method of control variables. The results show that for districts (or counties) with large differences in seismic risk, the risk areas can be further divided to apply differential rates. In areas with a diverse distribution of potential earthquake source areas and large differences in building density, there is a risk of overestimating or underestimating the pure rate of earthquake insurance when buildings are distributed evenly or partially evenly. This violates the break-even principle of rate setting. This study also provides a reference for earthquake catastrophe insurance companies to choose the spatial scale and the detailed level of exposure distribution in rate determination.
- Catastrophe insurance,
- Earthquake exposure,
- Premium rate,
- Spatial scale,
- Tangshan,
- China

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References(38)

References

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