Instruct: Identify the main and secondary category of Arxiv papers based on the titles and abstracts
Query: A Public-Private Insurance Model for Natural Risk Management: an
  Application to Seismic and Flood Risks on Residential Buildings in Italy   This paper proposes a public-private insurance scheme for earthquakes and
floods in Italy in which property-owners, the insurer and the government
co-operate in risk financing. Our model departs from the existing literature by
describing a public-private insurance intended to relieve the financial burden
that natural events place on governments, while at the same time assisting
individuals and protecting the insurance business. Hence, the business is
aiming at maximizing social welfare rather than profits. Given the limited
amount of data available on natural risks, expected losses per individual have
been estimated through risk-modeling. In order to evaluate the insurer's loss
profile, spatial correlation among insured assets has been evaluated by means
of the Hoeffding bound for r-dependent random variables. Though earthquakes
generate expected losses that are almost six times greater than floods, we
found that the amount of public funds needed to manage the two perils is almost
the same. We argue that this result is determined by a combination of the risk
aversion of individuals and the shape of the loss distribution. Lastly, since
earthquakes and floods are uncorrelated, we tested whether jointly managing the
two perils can counteract the negative impact of spatial correlation. Some
benefit from risk diversification emerged, though the probability of the
government having to inject further capital might be considerable. Our findings
suggest that, when not supported by the government, private insurance might
either financially over-expose the insurer or set premiums so high that
individuals would fail to purchase policies.

13
The categories of this paper are: quant-ph
24
The categories of this paper are: dg-ga
35
The categories of this paper are: mtrl-th
11
The categories of this paper are: hep-lat
3
The categories of this paper are: physics
12
The categories of this paper are: nucl-th
33
The categories of this paper are: plasm-ph
7
The categories of this paper are: hep-th
2
The categories of this paper are: math
15
The categories of this paper are: nucl-ex
0
The categories of this paper are: hep-ph
14
The categories of this paper are: math-ph
9
The categories of this paper are: nlin
37
The categories of this paper are: supr-con
8
The categories of this paper are: hep-ex
6
The categories of this paper are: astro-ph