Fire Insurance Research Articles

Premium estimation in the fire insurance through semiparametric bootstrap

Along with the development of information, science and technology, there is a quite popular developing resampling method, namely bootstrapping. Bootstrap estimates asymptotically against its original value (observation). Thus, the greater bootstrap replication, the resample distribution will be normally distributed. It indicates that the bootstrap estimator gives better results. Based on the goodness-of-fit test by using Kolmogorov-Smirnov test, the severity on fire insurance data follow Weibull 2 parameter distribution. A case study is conducted on reinsurance company’s data for shopping centre’s fire. It is a big data. Since it is a reinsurance company’s data, the data completeness may be inadequate. It causes the severity claim to be processed using semiparametric bootstrap.

Evaluations of Wind Field Estimations for Typhoon Jebi (T1821) by Using Fire Insurance Experience in Kansai Area

Evaluations of Wind Field Estimations for Typhoon Jebi (T1821) by Using Fire Insurance Experience in Kansai Area

Понятийно-категориальный аппарат правового регулирования противопожарного страхования: теоретико-правовой анализ

The development of fire insurance is one of the priorities of modern state policy in the field of fire safety. Particular attention is focused on the fact that currently there are no legal categories in the field of policy management of fire insurance. The purpose of the study: to consider the conceptual and categorical apparatus associated with the legal regulation of fire insurance and to conduct a theoretical and legal analysis. Tasks: to theorize the idea of the concept of legal regulation of fire insurance and its elements; develop and propose definitions of legal definitions on the legal regulation of fire insurance; to characterize the subject of legal regulation of fire insurance and the mechanism of legal regulation of fire insurance; determine the stages of the mechanism of legal regulation of fire insurance; analyze the effect of legal regulation of fire insurance. The research methods were: a general research method and a dialectical approach, expressed in the consideration and study of the theoretical foundations of the legal regulation of fire insurance; general scientific methods, observation, generalization, analysis, synthesis, induction, deduction, system method; private law method of cognition, formal legal method. As a result of the study, theoretical prerequisites have been created for the correct application of the concepts of legal regulation, which, accordingly, will positively affect the results of the operation of law in the field of fire insurance.

Features of fire insurance in the UK as a means of protection against the consequences of fires

Features of fire insurance in the UK as a means of protection against the consequences of fires

СПЕЦИФІКА СТРАХОВИХ ПОСЛУГ БУДІВЕЛЬНО-МОНТАЖНОЇ ГАЛУЗІ

The article investigates the features of installation and construction risks insurance. It is found that relations in the field of insurance in Ukraine are regulated by the Law of Ukraine "On Insurance", but this regulatory act does not contain special provisions for construction insurance. It is emphasized that insurance in the field of construction includes a set of risks related to several branches of insurance. Objects of installation and construction risks insurance by relevant branches of insurance are identified. The types of insurance programmes in construction developed by world practice are systematized. Analysis of information from the websites of insurance companies operating in the insurance market of Ukraine and providing insurance services for construction risk insurance has led to the conclusion that currently in Ukraine, technical risk insurance is mostly carried out as property interest insurance during construction or installation work, or as the third-party liability insurance. In addition, the websites of most insurance companies provide only a list of objects and risks that are subject to installation and construction risks insurance. In some cases, this list is not specified and is represented by generalized wording (for example, IC ASKA). The analysis also has shown that indicative information on the level of insurance rates can be obtained only on the websites of 5 insurance companies out of 10 considered. Accordingly, conclusions are made about the state of development of risks insurance in the construction industry on the basis of the results obtained. In Ukraine in terms of installation and construction risks insurance, insurance companies provide insurance coverage of individual risks, not all risks (CAR), which may occur on the construction site, in contrast to world practice. Most companies provide construction risks insurance according to the rules of fire insurance. In addition, insurers' risks increase due to the low level of responsibility of developers to investors. Neither the legislation nor the terms of the contracts prevailing on the market require a higher level of responsibility. The construction industry in our country is developing dynamically, so there is a need for the improvement of construction and installation risk insurance. Nowadays, installation and construction risks insurance in our country is available only to large professional insurers who have reinsurance contracts with foreign reinsurers.

Expected Value Premium Principle Pada Data Reasuransi

The amount of stop loss cover reinsurance using krone as Danish currency. The stop loss cover reinsurance scheme with a retention value of r = 50 million krone from fire insurance data in Denmark from 1980-1990 with truncate date at 10 million krone, resulting in a conditional expected value that decreases in value when the higher the threshold value. This is indicated by the threshold value of 1 = 2.976 resulting in pure premium of 1 = 0.1217, a threshold value of 2 = 10.0539 resulting in pure premium 2 = 0.0867 and a threshold value of 3 = 26.199 resulting in pure premium 3 = 0.0849. The use of expected value premium principle with the loading factor () is weighted to the value of the pure premium represented by. This is indicated by the weight of premium 1 = 0.13387, the weight of the premium 2 = 0.09537 and the weight of premium 3 = 0.09339.

Do Fire Hazard Zones Affect Home Insurance Premiums? Evidence from Los Angeles

This paper investigates the effectiveness of home insurance policies in light of the relationship between home insurance premiums and risk from fire hazards. We analyze the relationship between home attributes, with a focus on hazard class, and insurance premiums. In addition, it presents a comparative analysis of the extent to which these factors contribute to FAIR plan premiums vis-a-vis other voluntary market insurance premiums across Los Angeles County from 2011 through 2016. The estimation results of regression analysis indicate that hazard class has a relatively greater impact on insurance premiums for FAIR plan compared to other voluntary market insurance. However, an Extra Trees classifier model demonstrates that the relative importance of wildfire risk is significantly smaller for both types of insurances when compared to other home attributes. Interestingly, with increase in average income, the premium pool for FAIR plan decreases while that for voluntary market insurance plans increases. Among the other socioeconomic factors, unemployment rate, poverty rate, education level and median age, have similar impact on both FAIR plan and other insurance plans. Recommendations include modifying current fire insurance practices to assist in ushering homeowners away from hazardous areas.

Decision Analysis on Sustainable Value: Comparison of the London and Taiwan Markets for Product Integration of Family Security Services and Residential Fire Insurance

This paper explores a decision analysis on product integration of family security services and residential fire insurance in the London and Taiwan markets by using the proposed mathematical models for counting sustainable value. This paper shows the five main different results between London and Taiwan markets with ten different parameters of the family security market, to find out the optimal number of family security integrated services for each security company in London. The improvement of the risk aversion effect based on risk and financial management will enhance the market share of the private security industries in the London and Taiwan markets. The results of this research can serve as a reference for the decision-making of private security industries on product integration under sustainable value consideration. The research findings highlight the potential benefits for both the private security industry and the insurance industry in their design and negotiation for product integration to improve both of business operation and achieve corporate social responsibility goals to match the sustainability in the future.

A Risky Business: The Tai Ping Insurance Company and Fire Insurance in China, 1928–1937

This paper traces the history of the Chinese fire insurance industry and Tai Ping Insurance, one of the most successful Chinese insurance companies in the early twentieth century. It provides a case study on the “indigenization” of fire insurance in China by retracing how a fledgling firm mastered selling a foreign financial product and managed to win market share in an ostensibly adverse environment. This paper argues that while Tai Ping benefited from the growing embrace of insurance by the Chinese public, its success was ultimately driven by the company’s economies of scale, cross-selling synergies, and tight connections to banking. This paper also explores the broader context in which fire insurance operated by examining how the indigenization of insurance in China unfolded, with Chinese insurers like Tai Ping mediating the introduction of a new financial product, the transfer of new institutions, and the diffusion of new knowledge regarding risk. More generally, the history of Tai Ping and the Chinese fire insurance industry addresses a research lacuna in the history of insurance beyond the developed markets in Western Europe and North America, which has typically focused more on the experiences of British and American multinational enterprises and less on that of native companies. By highlighting the degree of institutional convergence and divergence between the Chinese insurance industry and its global counterparts, this paper contributes to a more inclusive history of the internationalization of insurance.

MODERNIZATION OF THE SYSTEM OF STATE SUPERVISION AND CONTROL IN UKRAINE

In modern conditions, the problems of fire safety in Ukraine become especially important. A significant increase of fires that have occurred in the country recently, have led to deaths and injuries and significant material damage. In this case, the introduction of modern effective methods of fire safety is particularly acute. The article shows main attention to significant shortcomings in the system of state regulation of fire safety in Ukraine, especially: lack of effective state supervision and control, non-compliance of domestic practices with standards and norms of high-educated countries, underdeveloped market of insurance services in the field of fire insurance. However, the no interest of the state, as well as individuals and legal entities in the use of risk-oriented approach with economic leverage in the form of an appropriate insurance system, lack of remote control by the state over business activities, low level of fire safety. The leading role in ensuring supervision and control belongs to the state itself, which must combine state and public beliefs and coercion, by applying to public relations appropriate measures provided for in the functioning of fire safety management.

Composite Rayleigh-Pareto distribution : Application to real fire insurance losses data set

This paper proposes a new distribution, called as composite Rayleigh-Pareto (CRP) distribution. Various statistical properties like moment method and maximum likelihood estimation are established. Compared with the composite lognormal-Pareto distribution, the resulting density has a similar shape and a larger tail. This is why we expect that such a model will be a better fit than the composite lognormal-Pareto one for some heavy tailed insurance claims data. Simulated examples and fire insurance data sets (actual data on Algerian fire insurance losses, Danish fire loss data) were analyzed to show the importance and applicability of this new distribution.

Fire Risk Assessment Models Using Statistical Machine Learning and Optimized Risk Indexing

It is very difficult for us to accurately predict occurrence of a fire. But, this is very important to protect human life and property. So, we study fire hazard prediction and evaluation methods to cope with fire risks. In this paper, we propose three models based on statistical machine learning and optimized risk indexing for fire risk assessment. We build logistic regression, deep neural networks (DNN) and fire risk indexing models, and verify performances between proposed and traditional models using real investigated data related to fire occurrence in Korea. In general, fire prediction models currently in use do not provide satisfactory levels of accuracy. The reason for this result is that the factors affecting fire occurrence are very diverse and frequency of fire occurrence is very sparse. To improve accuracy of fire occurrence, we first build logistic regression and DNN models. In addition, we construct a fire risk indexing model for a more improved model of fire prediction. To illustrate comparison results between our research models and current fire prediction model, we use real fire data investigated in Korea between 2011 to 2017. From the experimental results of this paper, we can confirm that accuracy of prediction by the proposed method is superior to the existing fire occurrence prediction model. Therefore, we expect the proposed model to contribute to evaluating the possibility of fire risk in buildings and factories in the field of fire insurance and to calculate the fire insurance premium.

The Doctrine of Indemnity and Fire Insurance Policy in Cameroon

Being secured is the major concern of every investor which therefore necessitate an insurance coverage. However, there is always a concern as to what happens when the incident secured against finally happens. Most especially, when fire insurance policies are concern. That therefore forms the basis of this paper which seeks to examine the concept of indemnity when fire insurance policy in Cameroon is concern. The paper does so by employing a doctrinal method of data collection. The data collected is analyzed with the thematic content approach. The ensuing results reveals the center position of the doctrine of indemnity when fire insurance is concern and its close relationship with doctrines like subrogation and insurable interest.

An Analysis of Flammability and Explosion Parameters of Coke Dust and Use of Preliminary Hazard Analysis for Qualitative Risk Assessment

Appropriate investments are required to achieve sustainable industrial development and safety conditions at the same time. A sufficient safety level is achieved when research outcomes are deployed in practice. This paper comprises a review of ignitability and explosive parameters and thermogravimetric tests of coke dust selected for the needs of the testing The KSt value of the tested dust was 64.2 bar·m/s, which means that it belongs to explosion hazard class 1 and that it has relatively low explosive abilities. The maximum explosion pressure for the tested dust was found to be 6.84 bar, and the minimum ignition temperature of a coke dust layer with a thickness of 50 mm was 400 °C. The use of the Preliminary Hazard Analysis in plants in which coke dust is present allows for limiting the scope of the risk analysis by eliminating elements that are either insignificant or of low significance from the viewpoint of explosion hazard. The adopted method allows qualitative assessment of the risk associated with threats, dangerous situations, and hazardous events that may take place during the use of devices, machines and their systems, and subsystems, including a qualitative evaluation of potential consequences of an accident or possible health loss. Risk assessment for life safety under building fires and explosions plays an important role in performance-based fire and explosion protection design and fire insurance ratemaking. The motivation for this work was the integrated protection of people, process equipment, building resilient infrastructure, promotion of inclusive and sustainable industrialization, business operation, and the natural environment.

The social geography of near and far: built environment and residential distance in mid-nineteenth-century New York City

AbstractThis article brings together two Geographical Information Systems (GIS) datasets – building-level land-use data from the 1852–54 Perris Fire Insurance Atlas, and geocoded home addresses from the 1854 city directory – to explore how desirable and undesirable conditions of the built environment accounted for new dynamics of residential separation in mid-nineteenth-century New York. Using spatial analysis, it shows how early forms of residential separation were driven by the desire of elites to create secluded residential neighbourhoods. Further, although stark contrasts delineated the extremes of wealth and poverty, the city's dominant landscape was defined by in-between conditions and subtle variations in built environment and residential distance.

How much is the fire “cost” in the modern world?

The article provides information on the “cost” of fires (losses from fires and the cost of fighting fires) in different ­countries of the world at the beginning of the XXI century. The presented assessment of the “cost” of fires (direct losses from fires, indirect losses, fire services expenditures, the cost of fire protection systems of buildings and the cost of fire insurance administration) was obtained based on an analysis of data from the World Fire Statistics Center (WFSC) for the period 1981–2011. It is shown that on average, direct losses from fires for all countries is estimated at 0.21 % of the Gross Domestic Product (GDP), indirect losses — 0.04 % (five times less than direct). The fire services expenditures is 0.16 % of GDP, fire protection of buildings — 0.28 % and cost of insurance administration — 0.11 %. In general, for 20 developed countries fire losses account for 0.25 % of GDP, the cost of fight­ing them is 0.57 % of GDP, i. e. costs are more than three times the losses. On average, the “cost” of fires in these 20 countries is 0.8 % of GDP. If we add to this the social losses associated with the fire deaths and fire injuries, the costs of research, training for the fire department, etc., then the “cost” of fires will be about 1–2 % of GDP. The presented estimate of the “cost” of fires in the United States based on reports from the National Fire Protec­tion Association (NFPA) of the United States. The data on the “costs” of fires of the WFSC and NFPA are compared. Quite reliable estimates of the “costs” of fires in the modern world have been obtained.

Risk and Regulation in Derivatives (or Why Derivatives Are a Blessing, Not a Curse)

In this article, first published in 1994, the authors aimed to defuse the widespread hysteria about derivatives fueled by media accounts (like Fortune magazine's cover story in the same year) by offering a systematic analysis of the risks to companies, investors, and the entire financial system associated with the operation of the relatively new derivatives markets. Such analysis ended up providing assurances like the following: As long as most companies are using derivatives mainly to limit their financial exposures and not to enlarge them in efforts to pad their operating profits, reported losses on derivatives should not be a matter for concern. “Complaining about losses on a swap used to hedge a firm's exposure,” as the authors note, “is like objecting to the costs of a fire insurance policy if the building doesn't burn down.” To the extent that companies are using derivatives to hedge—and what evidence we have suggests that most are—the default risk of derivatives has been greatly exaggerated. An interest rate swap used by a B‐rated company to hedge a large exposure to interest rates will generally have significantly less default risk than a AAA‐rated corporate bond issue. Thanks to the corporate use of derivatives, much of the impact of economic shocks such as spikes in interest rates or oil prices is being transferred away from the hedging companies to investors and other companies better able to absorb them. And in this fashion, defaults in the economy as a whole, and hence systemic risk, are effectively being reduced, not increased, through the operation of the derivatives markets. Moreover, the authors warn in closing that the likely effect of then proposed derivatives regulation would be to restrict access to and increase the costs to companies of using derivatives markets. As one example, the excessive capital requirements associated with derivatives facing bank dealers—based on gross rather than net measures of exposure—and which regulators have since proposed extending to nonbank dealers—were expected to have the unintended effect of encouraging dealers to sell precisely the kinds of riskier, leveraged derivatives that Bankers Trust sold Procter & Gamble, and that functioned as Exhibit A in the Fortune article.

Fires and Fire Safety Measures in Churches of Tobolsk North during the Synodal Period (1722-1917)

The results of a study on the extent, causes and measures of combating fires in churches in the north of the Tobolsk diocese in the XVIII - early XX centuries are presented in the article. Sources indicate “large” fires in Berezov and Surgut and few in rural parishes, and, as a rule, they indicate the destruction of church buildings and the futility of public efforts to prevent the fire element. The destruction of churches from fire is presented as a common cause of rebuilding of parish buildings in the 18th century. It is noted that the main cause of the fires was the careless handling of fire by church servants when burning stoves. Fire safety measures are characterized by the adoption of relevant legislative norms and administrative orders, monitoring of building codes and the repair of irregularities made during the construction of churches, and the spread of fire insurance. It is indicated that the state tried to involve not only the police, but also the population in the fight against fires. It is concluded that, despite the efforts made, the fire department in the territory of the region remained at a low level and did not allow to successfully confront the fire element.

Terrorism Risk Insurance Act: Time to Renew . . . or Rethink?

This paper summarizes the U.S. program for terrorism insurance, outlines its advantages and disadvantages, and describes the current proposals for extension of the program. The program, generally referred to as a “Federal Backstop,” functions in some ways that are similar to reinsurance, but it does not require participants to pay premiums ex ante. Instead uses an ex post recoupment mechanism to recover some or all of the Federal payments made under the program. This approach has the advantage of reducing the cost and increasing the availability of terrorism insurance. Some have criticized the program for its interference in market mechanisms, but the program facilitated the development of the market underneath the backstop. The program does not cover NBCR risk, and some types of insurance are excluded. In addition, the program does not preempt state price regulation or the mandated use of the standard fire insurance policy, which provides coverage for ensuing fires after terrorism events. These weaknesses are not addressed by current proposed legislation to extend the program for seven years without any changes. The strong, bipartisan support for the proposed legislation suggests that it is likely to pass.

Fitting Nonstationary Cox Processes: An Application to Fire Insurance Data

In insurance practice, claims often occur in clusters and their arrivals may depend on various external and time-dependent factors. In this article, we propose a statistical approach for modeling claim arrivals by considering clustered arrivals and non-stationarity simultaneously. To this end, we extend the Cox process methodology with Lévy subordinators presented in Selch and Scherer (2018) relaxing the stationarity of increments assumption. A particular special case of the proposed approach is a dynamic and flexible model of negative binomially distributed claim numbers with trends and seasonal variations of the parameters. For illustration purposes, we fit the model to a fire insurance portfolio and show that it allows the modeling of cluster occurrences in a seasonal pattern while preserving overdispersion, which is frequently observed in claim count data. We illustrate its use in forecasting and Value-at-Risk and expected shortfall computations of the aggregate insurance risk. Finally, we provide a multivariate extension of the model, where simultaneous cluster arrivals in different components are generated by a nonstationary common subordinator.