Random occurrence or predictable disaster? New models in earthquake probability assessment
Imagine your favourite newspaper one day supplementing the daily weather report with an earthquake forecast.
Admittedly, this is still a far-fetched idea, but recent advancements in seismic research have helped to improve earthquake probability assessments by including the factors of time dependence and stress transfer from past events. Swiss Re maintains that the insurance industry should integrate these new findings in order to ensure that earthquake premiums remain commensurate with the risks concerned. This will ensure a fair global risk-sharing via the international reinsurance market. It will also help the insurance industry provide risk transfer products which manage the financial consequences of earthquakes in a sustainable and cost-effective way.
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