Computational modeling of homeowners, insurers and government decision-making for hurricane risk management
In Chapter 1, we develop a computational framework for the stochastic and dynamic modeling of regional natural catastrophe losses with an insurance market to support government decision-making for hurricane risk management. The framework is comprised of a set of interacting models to (1) simulate hazard events; (2) estimate regional hurricane-induced losses from each hazard event based on an evolving building inventory; (3) capture acquisition offer acceptance, retrofit implementation and insurance purchase behaviors of homeowners; and (4) represent an insurance market sensitive to demand with strategically interrelated primary insurers. This framework is linked to a simulation-optimization model to optimize decision-making by a government entity whose objective is to minimize region-wide hurricane losses. We examine the effect of different policies on homeowner mitigation, insurance take-up rate, insurer profit and solvency in a case study using data for eastern North Carolina. Our findings indicate that an approach that coordinates insurance, retrofits and acquisition of high-risk properties effectively reduces total (uninsured and insured) losses.Resilience to coastal hazards is inextricably intertwined with issues of equity and economic prosperity. In Chapter 2, we investigate the important and complementary roles that three primary types of risk mitigation tools (property acquisition, home retrofit, and insurance) need to play in creating a built environment that is more resilient to hurricane events and supporting economic recovery post event, while protecting the most vulnerable among us. We propose that, though not easy, it is possible to develop sustainable, equitable, win-win solutions that are better both for each stakeholder individually and for society as a whole. Through a case study on households in eastern North Carolina, we demonstrate the importance of alignment with the natural, ingrained decision-making processes of the stakeholders involved. We examine the substantial progress that risk mitigation tools could make in reducing physical damage experienced by affected households and avoiding GDP loss when considering the economic impact of events. We also demonstrate that, when designed with considerations to favor the vulnerable population, mitigation and insurance policies can facilitate the alleviation of inequities. In Chapter 3, we further explore the experience of different income-level households in the hurricane context, especially focusing on the low income population, and suggest the design and implementation of equitable disaster mitigation interventions.
Nozick, Linda K.
Topaloglu, Huseyin; Daziano, Ricardo
Ph. D., Systems Engineering
Doctor of Philosophy
dissertation or thesis