An Overview of Economic Impact of Resilient Seismic Techonologies on Earthquake Insurance in New Zealand

Abstract

New Zealand's plate boundary location implies its vulnerability to earthquake hazard. Earthquakes have caused significant damage to the built environment of the country and heavily disturbed its economy. In particular, the insurance industry is constantly struck by the high financial impact of the earthquake damages. Recently, a new generation of resilient seismic technologies is making their way to the construction industry, which offers a significant damage reduction in the structural and non-structural elements of buildings. They provide a possibility of immediate occupancy after the seismic event. The economic function of such advancements, however, has not received sustained attention from the insurance industry. This paper gives an overview about potential costs and savings associated with the use of resilient seismic technologies in comparison to the conventional solutions. A special emphasis will be given to the insurance-related costs. From the presented overview, it can be indicated that the advantages of such new technologies can effectively be translated with financial returns, which will affect the insurance costs in turn. A related potential has been found in cutting the insurance premiums and pay-outs.