Insurance is a method of transferring or sharing risks from catastrophic losses resulting from a hazardous event. It entails a large group of individual risk-takers, who all contribute to a common pool of financial resources by regular contributions and premiums.  

Earthquake Insurance

Various types of risk from earthquakes are covered by an array of insurance policies, which cover properties and contents, life and health, workers compensation, and business interruption. The insurer is generally a commercial company whose business is selling policies and managing risks, as well as profiting returns for shareholders.   more


Reinsurance is a means of risk management, which is purchased by an insurance company from another insurance company. Although, reinsurance has various functions, the main reason to buy reinsurance is to transfer risk from insurer to reinsurer.

Earthquake Reinsurance

After a major earthquake, the large payouts of insurance claims by insurance companies could go further than what they can afford; therefore, the government shares insurance responsibility through reinsurance.  more

Parametric Insurance

This type of insurance does not indemnify the pure loss. In Parametric insurance, the payout of the insurance policy is calculated using a model that shows the actual damage on the ground.  more

Adapted from:

Oliveira, C.S., A. Roca, and X. Goula. Assessing and Managing Earthquake Risk, Geo-Scientific and Engineering Knowledge for Earthquake Risk Mitigation: developments, tools, techniques. Spence, R. and A. Coburn. Earthquake Risk and Insurance. Volume 2, 2006, pp. 385-387