Underwrite or Not: in a World of Natural Disasters

DOI: https://doi.org/10.62517/jbm.202409511

Author(s)

Xihan Sun

Affiliation(s)

China Foreign Affairs University, Beijing, China

Abstract

Extreme-weather events are now a growing concern for many regions and communities around the world. The sustainability of property insurance under such context has already becoming a huge problem. However, for lots of communities, their historical sites and spiritual architectual icons are particularly vulnerable under rampant natural disasters, and the huge losses make it impossible for insurance companies to protect them properly and instantly. It is time we step in to stop them choking from bad weathers, from a province to an ancient arch bridge.To address such issue, aquantitative model is established: Underwriting Risk Assessment Model, based on AHP.This model is designed for insurance companies to decide whether to underwrite in the regions where extreme-weather events are on the rise. To realize it, I harnessed level-one analytic hierarchy process (AHP) not only to rate the risk degree for certain regions, but also set the framework of assessment model. Through establishing judgement matrices, I obtained and compared the ratings and weights for the Western USA and the Southeast China to demonstrate the model, and to drew a conclusion.Finally, sensitivity analysis proved the objectivity, reasonableness and robustness of the model. With such certificate in hand, I am more than ready to help communities with their urgent need to make rational and favorable decisions.

Keywords

Property Insurance; Underwrite; Extreme-Weather Events; AHP; Assessment Model

References

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