Earthquake insurance for Greece: comparative analysis and pricing issues

Purpose – The present article serves two main goals. First, the proposed scheme for Greece is being involved in a benchmarking analysis. Second, an expansion of previous quantitative models is undertaken in order to estimate risk-based premiums for the proposed national insurance scheme. Design/methodology/approach – The benchmarking analysis of the proposed scheme is undertaken in comparison to the best practices of the catastrophe insurance systems operating in most member-states of the EU. Risk modelling is employed to calculate risk-based premiums. Findings – The benchmarking analysis leads to conclusions which may be useful for the stage of actual implementation of such a program in Greece. Risk-based premiums for the proposed national insurance scheme are estimated for all CRESTA zones of the country. Research limitations/implications – Uncertainty of estimated catastrophe losses is a limitation of the research. Practical implications – The paper provides a detailed description of the proposed earthquake insurance scheme. Social implications – The Greek Government should evaluate the proposal for the establishment of a national insurance program for earthquake damages. Originality/value – The paper's originality/value consists of the construction of a unique data bank of the residential stock of Greece, and a comprehensive proposal for earthquake insurance, based on the best practices of national Cat insurance schemes.