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Estimation of potential earthquake losses for the evaluation of earthquake insurance risks

Karaca, Hakan
Estimation of extreme seismic losses has been a major concern for the insurance sector. Especially, the recent series of large magnitude earthquakes have forced both the client and the insurance companies to obtain reliable estimates of potential seismic losses. Thus, seismic risk mapping has become a major task for the insurance industry. For seismic risk mapping it is necessary to develop a model which integrates the information on seismic hazard and the information on expected earthquake damage on engineering facilities in a systematic way, yielding to estimates of the seismic risk. This study aims firstly establishing the most up to date seismic hazard mapping procedure based on the appropriate stochastic models. The conversion of the mapped seismic hazard information into risk metrics requires including data on the vulnerability to damage of the exposure at the location under consideration. Thus the second aim of the study is to establish probabilistic procedures for the estimation of the vulnerability of buildings subjected to earthquakes of different severity. Finally, a risk model will be developed to integrate the probabilistic understanding of the hazard with the exposure and vulnerability to arrive at mapped information on risk costs (i.e. annual expected losses) as well as loss exceedence at a range of return periods. Such an output will be of extreme use to the insurance companies in assessing the risks involved due to future earthquakes.