TORNADO LOSSES AND INSURANCE

Large Insurance Losses Distributions

Large insurance losses happen infrequently, but they happen. In this paper we present the standard distribution models used in fire, wind–storm or flood insurance. We also present the classical Cramér-Lundberg model for the total claim amount and some more recent extensions. The classical insurance risk measure is the ruin probability and we give a full account of the ruin event in such models....

Mitigating Disaster Losses through Insurance

Losses from natural disasters have increased in recent years due to growth of population in hazard-prone areas and inadequate enforcement of building codes. This article first examines why homeowners have not voluntarily adopted cost-effective protective measures and have limited interest in purchasing insurance. It then proposes a disaster-management program which utilizes insurance coupled wi...

The Nature of Modelling Insurance Losses

Mitigating Losses from Climate Change through Insurance

Climate change potentially amplifies catastrophe risks by raising the magnitude and frequency of certain extreme events in the long term. Its crucial feature is irreversibility. The availability and affordability of insurance will also be diminished in the presence of climate change. Weather losses can be mitigated by actions of the policyholder; however, the private returns from many mitigatio...

Generators of Seismic Events and Losses: Scenario-based Insurance Optimization

A principal difficulty in insuring catastrophic risks is the insufficiency of disaggregated historical data on the catastrophe losses. The lack of data and complex spatial and dynamic interdependencies between catastrophic events imply the necessity to base the insurance of property against natural hazards on catastrophe modeling. The purpose of this research is to develop a working tool for in...