Public-private partnership for earthquake mitigation involving retrofit and insurance

Xijun Yao, Hsi Hsien Wei, Igal M. Shohet, Mirosław J. Skibniewski

Research output: Contribution to journalArticlepeer-review

4 Scopus citations


Public-Private Partnerships involving governments and insurers have been used worldwide for mitigation of natural-hazards. However, the implementation of such systems in developing countries presents problems for their key stakeholders. On the one hand, property owners are hesitant to purchase insurance or invest in retrofit projects due to cost considerations. On the other hand, insurers are reluctant to cover potential seismic losses, because of uncertainties about the risk. This study introduces an innovative Public-Private Partnership framework for property owners, insurers and governments to facilitate decisions related to hazard insurance and structural retrofit of vulnerable buildings. This framework can also help insurance firms reduce the level of corporate financial assets available for payment of compensation to their clients, as required by regulations aimed at reducing the risk of insurer insolvencies. Property owners are motivated to participate in the framework by extra mitigation subsidies from the government. While the government will be reimbursed for part of the cost of these retrofit projects by insurance firms, whose own savings will be achieved through reductions to legally mandated corporate capital. A case study is presented to demonstrate the feasibility of this approach for mitigating seismic risk to residential buildings in a rural area.

Original languageEnglish
Pages (from-to)810-826
Number of pages17
JournalTechnological and Economic Development of Economy
Issue number6
StatePublished - 2 Nov 2017


  • insurance
  • natural hazard
  • public-private partnership
  • retrofit

ASJC Scopus subject areas

  • Finance


Dive into the research topics of 'Public-private partnership for earthquake mitigation involving retrofit and insurance'. Together they form a unique fingerprint.

Cite this