Probabilistic assessment of earthquake insurance rates for buildings - Seismic Risk Analysis and Management of Civil Infrastructure Systems - page 783

insurance premiums requires two types of investigation, namely: seismic
hazard analysis and estimation of potential earthquake damage to struc-
tures. In the following subsections, the models used for these two types of
investigation are briefl y discussed and a simple probabilistic model devel-
oped for the assessment of earthquake insurance rates is presented. The
model is based on the integration of earthquake hazard with structural
damage through matrix multiplication where the elements of seismic hazard
exceedance values are multiplied by the appropriate elements of the damage
probability matrices.
29.2.1 Seismic hazard analysis
In the probabilistic term, seismic hazard can be defi ned as the probability
of exceeding different levels of a selected earthquake severity parameter
(peak ground motion parameters, intensity, etc.) at a given place and within
a given period of time due to expected seismic activity in the region. The
future earthquake threat at a site is generally quantifi ed by carrying out
either a deterministic or probabilistic seismic hazard analysis. Considering
aleatory uncertainties related to earthquake occurrences with respect to
time, space, magnitude, and additional epistemic uncertainties, probabilis-
tic models appear to be more appropriate than deterministic ones. Besides
the popularity of the probabilistic approach, recently more attention has
been paid to the assessment of seismic hazard due to active faults. Accu-
mulation of more data and information on the main characteristics of
faults has also contributed to this. Accordingly, in the evaluation of the
seismic hazard component of the earthquake insurance, more attention
should be given to the potential threat posed by faults, and the stochastic
models consistent with the known characteristics of faults should be
utilized.
Many models have been developed for probabilistic seismic hazard anal-
ysis (PSHA; see also Chapter 1). Most of the earlier models of seismic
hazard assessment were based on the assumption that earthquake occur-
rences are independent events in space and time, utilizing the Poisson
model (Cornell, 1968) or the extreme value statistics (Milne and Davenport,
1969). Later studies considered the temporal or spatial dependence of
earthquakes. Some models consistent with the 'elastic rebound theory' took
into account the temporal dependence of earthquakes based on the pro-
cesses with Markovian characteristics. Attempts were also made to model
the spatial dependence of earthquakes. In recent studies, the occurrence of
earthquakes is treated as a space-time process and modeled as a random
fi eld (e.g. Yucemen, 1993; Akkaya and Yucemen, 2002).
The probabilistic formulation adopted in this study is based on the stan-
dard PSHA model. The PSHA method that will be employed for the assess-