Abstract

The existing disaster databases allow analyzing losses produced by previous events and assessing the risk to natural hazard in a similar way as the insurance industry does for vehicles, health, etc., if the conditions and trends are maintained. Among the existing disaster databases, we selected DesInventar whose vast majority of records correspond to “small” events; this selection is of special interest as these small events are often ignored because, individually, they only stroke a few assets accounting for low economic losses. Nevertheless, their accumulated effect can have a significant impact over the economic and fiscal sustainability of urban areas, regions or countries. Also, considering the difficulties involved in assessing risk for those small disasters, like the lack of general models and the elevated susceptibility to local variables of the results, this approach can give answers so far unavailable. The methodology herein proposed has been applied to the assessment of risk (in the terms of the loss exceedance curve) in 23 countries.

Abstract

Taken into account that the natural hazard risk is a contingent liability and, therefore, a sovereign risk for national governments, it is important to assess properly the potential losses to design a suitable risk reduction, retention and transfer strategy. In this article, a disaster risk assessment methodology is proposed based on two approaches: on the one hand, the empiric estimation of losses, using information available from local disaster databases, allowing estimating losses due to small-scale events and, on the other hand, probabilistic evaluations to estimate losses for greater or even catastrophic events, for which information usually is not available due to the lack of historical data. A ‘‘hybrid’’ loss exceedance curve is thus determined, which combines the results of these two approaches and represents the disaster risk in a proper and complete way. This curve merges two components: the corresponding to small and moderate losses, calculated using an inductive and retrospective analysis, and the corresponding to extreme losses, calculated using a deductive and prospective analysis. Applications of this risk assessment technique are given in this article for eleven countries.

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