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Estimation of Insurance Premiums for Coverage Against Natural Disaster Risk: an Application of Bayesian Inference : Volume 13, Issue 3 (20/03/2013)

By Paudel, Y.

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Book Id: WPLBN0004018356
Format Type: PDF Article :
File Size: Pages 18
Reproduction Date: 2015

Title: Estimation of Insurance Premiums for Coverage Against Natural Disaster Risk: an Application of Bayesian Inference : Volume 13, Issue 3 (20/03/2013)  
Author: Paudel, Y.
Volume: Vol. 13, Issue 3
Language: English
Subject: Science, Natural, Hazards
Collections: Periodicals: Journal and Magazine Collection, Copernicus GmbH
Publication Date:
Publisher: Copernicus Gmbh, Göttingen, Germany
Member Page: Copernicus Publications


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J. H. Aert, J. C., W. Botze, W. J., & Paudel, Y. (2013). Estimation of Insurance Premiums for Coverage Against Natural Disaster Risk: an Application of Bayesian Inference : Volume 13, Issue 3 (20/03/2013). Retrieved from

Description: Institute for Environmental Studies, Amsterdam Global Change Institute (AGCI), VU University Amsterdam, Amsterdam, the Netherlands. This study applies Bayesian Inference to estimate flood risk for 53 dyke ring areas in the Netherlands, and focuses particularly on the data scarcity and extreme behaviour of catastrophe risk. The probability density curves of flood damage are estimated through Monte Carlo simulations. Based on these results, flood insurance premiums are estimated using two different practical methods that each account in different ways for an insurer's risk aversion and the dispersion rate of loss data. This study is of practical relevance because insurers have been considering the introduction of flood insurance in the Netherlands, which is currently not generally available.

Estimation of insurance premiums for coverage against natural disaster risk: an application of Bayesian Inference

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