Catastrophe models for informing risk management policy: An introduction

Abstract

Catastrophe models that combine data on past occurrences with future simulations of the hazard, exposure and vulnerability, and that take account of the dynamic environment as well as correlated loss distributions, are becoming increasingly important for assessing the risks of extreme events. This volume demonstrates innovative ways for adapting catastrophe models to aid risk management policy processes via a number of wide ranging applications. These are grouped into three parts, according to whether they inform local or regional risk management policy (Part I); the management of country-wide catastrophe risk and its implication on development (Part II); and the participatory design of a national insurance program (Part III). After discussion of the rational for the proposed approaches, which integrate across multiple disciplines and take into account the diverse values and preferences of stakeholders, this chapter introduces Part I of the volume, including cases on the management of flash flood risk in Vienna, Austria, an earthquake insurance program for the Tuscany region in Italy, balancing stakeholder concerns in establishing flood risk management strategies in northern Vietnam, and the choice of appropriate discounting factors in the design of infrastructures under consideration of catastrophe risk.