Research on the Sustainability of Property Insurance Based on Region Under Extreme Weather

Abstract

In the context of global climate change, the increasing frequency of extreme weather events poses significant challenges to the property insurance industry. In order to determine whether the companies should underwrite the insurance in extreme weather conditions, the paper builds the risk level evaluation model and ALARP risk assessment criterion to solve this problem. Through calculating the risk factor Ω in our model, the paper could decide whether the companies should underwrite. Then the paper chooses China and USA to conduct risk level evaluation. The paper gets the result that Ω is 0.64 in China and 1.13 in USA. The paper concluded that insurance companies will choose to underwrite policies to take the risk in many locations in China and not to do so in USA. In order to develop community building and development strategies to adapt to risks posed by climate change in specific locations, This paper builds the MGWR model in order to decide the best strategies to develop the community corresponding to the calculated loss and minimize the loss. Finally, the paper chooses Asia and North America to show our simulation results and provide strategies like “infrastructure development, emergency preparedness” to promote the community development. These results are straightforward to interpret, facilitating acceptance by decision-makers.