Probabilistic assessment of earthquake insurance rates for buildings - Seismic Risk Analysis and Management of Civil Infrastructure Systems - page 803

the code requirements with respect to earthquake-resistant design pro-
visions, but also create a control mechanism.

• The current compulsory earthquake insurance tariff charges the build-

ings in the same building class equally, irrespective of the individual
features of each building. Features that affect the earthquake response
of buildings in a negative way, such as soft storey, plan irregularity, weak
storey, age, usage, etc., as well as the features of the soil on which build-
ings are located, are not considered within the current earthquake insur-
ance implementation. The presence of these negative aspects should be
taken into consideration and a certain surcharge should be added in the
calculation of the earthquake insurance premiums.

• Seismic vulnerability of structures is presented through fragility curves

instead of damage probability matrices in most of the recent studies.
Multiplication of the elements of hazard curves by the elements of fra-
gility curves would a more preferable procedure in the computation of
expected annual damage estimates, because in the fragility methods
uncertainties can be directly incorporated into the computations.
Accordingly, it will be more appropriate to utilize fragility curves in
future studies concerning the quantifi cation of earthquake insurance
rates.

• Although earthquake insurance can be used as a tool for the improve-

ment of construction practice and the enforcement of the seismic codes,
its main aim is to provide a post-event response for the economical
management of large-scale catastrophic earthquakes. Mitigation before
such disasters and following an active prevention scheme certainly will
reduce the number of damaged buildings and life losses. This issue has
been addressed in a comprehensive way by the OECD as a response
to the dramatic rise in the frequency and severity of catastrophes in
recent years. In the year 2006, OECD has established an International
Network on the Financial Management of Large Scale Catastrophes
with the sole purpose of dealing with the fi nancial management of
large-scale catastrophes, with particular emphasis on earthquakes, the
role of risk mitigation and insurance in reducing the impact of natural
disasters,

29.5.2 The implementation of the compulsory earthquake
insurance scheme and TCIP

Based on the past 12 years of experience the following comments can be
made with respect to TCIP:

• TCIP has proved to be a well-designed public-private partnership due

to its satisfactory performance over the past 12 years. By engaging the