Single Earthquake Bond Pricing Framework with Double Trigger Parameters Based on Multi Regional Seismic Information

The investor interest in multi-regional earthquake bonds may drop because high-risk locations are less appealing to investors than low-risk ones. Furthermore, a single parameter (earthquake magnitude) cannot accurately express the severity due an earthquake. Therefore, aim of this research is propose valuing framework for (SEB) using double trigger type, namely magnitude and depth earthquakes, based on zone division according seismic information. stage divided into two stages. first divide covered area regional administrative boundaries clustering disaster risk index (EDRI), second involves earthquakes distance between events K-Means K-Medoids algorithms. distribution triggers modeled Archimedean copula. result obtained that price SEB EDRI categories higher by with maturities 5 years. expected assist Special Purpose Vehicle determining SEB.