Pricing flood insurance with a hierarchical physics-based model

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<dc:creator>Boudreault, Mathieu</dc:creator>
<dc:date>2020-06-01</dc:date>
<dc:description xml:lang="es">Sumario: Floods account for a large part of global economic losses from natural disasters. As a result, the private insurance sector is increasingly participating in the financial risk sharing, thus expanding the role of actuaries to flood risk management. In this article, we investigate pricing and spatial segmentation of flood risk in the context of private insurance, meaning that individual risk assessment should minimize adverse selection. As such, we design a hierarchical flood risk model that allows an assessment at the individual level. Our model relies on a chain of physics-based climate, hydrological, and hydraulics modules combined with civil engineering methods to map the distribution of individual flood losses at high resolution. Building on such approach, we design pricing and segmentation methods tailored for flood risk management. We then apply the methods to study flood risk in a small city in the province of Quebec. We calculate premiums, analyze the impacts of risk sharing, set pricing territories consistent with the spatial flood risk, and finally, quantify the impact of greenhouse gas emission scenarios on individual and aggregate losses, premiums, and tail risk measures.</dc:description>
<dc:identifier>https://documentacion.fundacionmapfre.org/documentacion/publico/es/bib/171870.do</dc:identifier>
<dc:language>eng</dc:language>
<dc:rights xml:lang="es">InC - http://rightsstatements.org/vocab/InC/1.0/</dc:rights>
<dc:subject xml:lang="es">Inundaciones</dc:subject>
<dc:subject xml:lang="es">Desastres naturales</dc:subject>
<dc:subject xml:lang="es">Modelos actuariales</dc:subject>
<dc:subject xml:lang="es">Mercado de seguros</dc:subject>
<dc:subject xml:lang="es">Riesgo financiero</dc:subject>
<dc:subject xml:lang="es">Gerencia de riesgos</dc:subject>
<dc:subject xml:lang="es">Riesgos de la naturaleza</dc:subject>
<dc:subject xml:lang="es">Distribución de pérdidas</dc:subject>
<dc:type xml:lang="es">Artículos y capítulos</dc:type>
<dc:title xml:lang="es">Pricing flood insurance with a hierarchical physics-based model</dc:title>
<dc:relation xml:lang="es">En: North American actuarial journal. - Schaumburg : Society of Actuaries, 1997- = ISSN 1092-0277. - 01/06/2020 Tomo 24 Número 2 - 2020 , p. 251-274</dc:relation>
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