EARTHQUAKE INSURANCE MODEL USING SPATIO-TEMPORAL POINT PROCESS APPROACH

Pratiwi, Hasih, Subanar

2015 | Tesis | FMIPA

earthquakes occur almost every year in Indonesia. Physical losses caused by earthquakes are death or casualties and damage to buildings and areas. Therefore, efforts to reduce the risk of earthquake are very necessary. Risk is the probability of occurrence of a dangerous event or natural disaster. Risk can also be defined as a condition of uncertainty, which in the event of an unexpected situation can cause a loss. Relating to risk or loss generated by earthquake it is of course does not get out of insurance world. Insurance as non-bank financial institution can give guarantee or protection as done by banking sector. This research discusses an insurance model of earthquake using a spatio-temporal point process approach. A spatio-temporal point process can be expressed by conditional intensity function ?(t; x; y) which represents the expected number of events at time t and location (x; y), if given observations up to time t. In general, ?(t; x; y) does not only depend on t; x; y but also the time and location of the previous events. The purposes of this study are (1) to construct a procedure to identify mainshocks, (2) to develop a spatio-temporal point process model corresponding to earthquake events, (3) to construct an earthquake risk map in Java Island, and (4) to construct an earthquake insurance model in Java Island. We use earthquakes data from U.S. Geological Survey which consists of time of occurrence, longitude, latitude, magnitude, depth, and catalogue source. The time span of this research is from January 1st, 1973, to December 31st, 2010. The time of occurrence data is in year-month-day-minute-second format so we have to convert it in day and then we construct an algorithm to identify mainshocks in an earthquake sequence. This algorithm is based on location and occurrence time of earthquakes, and is applied for magnitude greater or equal to 5 with shallow depth. This algorithm can be represented as a branching process with the distribution of the number of aftershocks triggered by a mainshock, %, as a power of %. By considering time and space clustering effects we use an extension of epidemic type aftershock sequence model represented with its conditional intensity function. If the conditional intensity function has at least third derivatives with respect to its parameters then the estimator is consistent, asymptotically normal distributed and efficient. Zonation map of earthquake generated in this research is different from the zonation map SNI 2010 issued by Indonesian Ministry of Public Works. The difference lies on the distribution of earthquake zone, especially in regencies and cities with high risk. Based on the spatio-temporal point process, the existing method for calculating earthquake premium rate is modified to obtain the more detail result. The premium rates for high and medium intensities obtained from this research are significantly greater than the premium rates issued by PT Reasuransi Maipark Indonesia. Availability and completeness of data extremely establish the accuracy of the calculation of earthquake insurance premium rate in each regency or city. This method is a new alternative way in calculating earthquake insurance premium in Indonesia.

Kata Kunci : point process, mainshock, spatio-temporal point process, intensity function; epidemic type aftershock sequence model; damage probability matrix