Counter-Measures Against Earthquake Risks Around the World

This paper first introduces briefly the disasters resulting from major earthquakes and analyze the risk function by examining its variables. It shows that, for earthquake risk, the future is more hazardous than the present and the past The paper then offers a comprehensive list of counter-measures against earthquake risk, from the simple ones dealing with the variables to insurance, reinsurance, financial incentive and insurance derivatives. These strategies must be combined and holistically integrated by taking into consideration all relevant factors in order to achieve the maximum level of control over earthquake risk.

KEYWORDS:Exposure, hazard, vulnerability, topography, liquefaction, subsidence, seismic fault, attenuation, mitigation, tsunami, excess of loss, earthquake reserve, equalization reserve, futures, options, swaps, insurance derivatives, OTC, hedge