Author(s)

Yingqi Liu ¹, Ruohan Wang ¹, Linghe Niu ¹

Affiliation(s)

¹ Houston International Institute, Dalian Maritime University, Dalian, 116026, China

Corresponding Author

ABSTRACT

The insurance industry faces significant challenges as the frequency of extreme weather events increases. In this paper, two key issues are investigated, and solutions are proposed. First, an ARIMA model is used to predict the frequency of extreme weather events in the future, and the TOPSIS model evaluates insurance underwriting decisions. The results show that the United States has the highest similarity (0.438) in approaching the ideal solution's positive aspects. Next, principal component analysis (PCA) optimized the insurance decision-making model, which considered the number of extreme weather events, GDP per capita, population density, and resilience to determine the per capita premiums for the five regions. This paper provides a comprehensive set of risk assessment and decision-making protection programs, which improves the decision-making efficiency of insurance companies and provides a scientific basis for community leaders to develop effective building protection measures.

KEYWORDS

CITE THIS PAPER

Yingqi Liu, Ruohan Wang, Linghe Niu, Research on the sustainability of property insurance based on risk assessment and decision protection models. Financial Engineering and Risk Management (2024) Vol. 7: 123-131. DOI: http://dx.doi.org/10.23977/ferm.2024.070516.

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