Aslan, V Z (2012) Financial implications of engineering decisions. PhD thesis, Texas A&M University, USA.
Abstract
When society fails to effectively integrate natural and constructed environments, one of the cataclysmic byproducts of this disconnect is an increased risk of natural disasters. On top of the devastation that is the aftermath of such disasters, poor planning and engineering decisions have detrimental effects on communities as they attempt to recover and rebuild. While there is an inherent difficulty in the quantification of the cost of human life, interruption in business operations, and damage to the properties, it is critical to develop plans and mitigation strategies to promote fast recovery. Traditionally insurance and reinsurance products have been used as a mitigation strategy for financing post-disaster recovery. However, there are number of problems associated with these models such as lack of liquidity, defaults, long litigation process, etc. In light of these problems, new Alternative Risk Transfer (ART) methods are introduced. The pricing of these risk mitigating instruments, however, has been mostly associated with the hazard frequency and intensity; and little recognition is made of the riskiness of the structure to be indemnified. This study proposes valuation models for catastrophe-linked ART products and insurance contracts in which the risks and value can be linked to the characteristics of the insured portfolio of constructed assets. The results show that the supply side – structural parameters are as important as the demand – hazard frequency, and are in a highly nonlinear relationship with financial parameters such as risk premiums and spreads.
| Item Type: | Thesis (Doctoral) |
|---|---|
| Thesis advisor: | Damnjanovic, I |
| Uncontrolled Keywords: | insurance; financing; litigation; pricing; liquidity; quantification; natural disaster |
| Index terms: | insurance, strategy, mitigation, recovery, quantification, default, natural disaster, risk premium, litigation, post-disaster recovery, pricing, liquidity, society, financing |
| Subjects: | economic analysis, management, financial risk, operations management, communities and social development, environmental hazards, dispute resolution, measurement and scaling, post-disaster and reconstruction |
| Topics: | Research Practice, Sustainability, Business Strategy, Legal Issues, Stakeholder Management, Project Management, Urban Studies, Cost Management |
| Descriptive scope: | 3 PCA |
N.B. Descriptive scope is a count of how many of the five facets of empirical research are indicated by the words used in title, abstract and keywords. It is not intended as a judgement on the research; merely a count of the kind of word we would expect to indicate Phenomenon, Concepts, Theoretical framing, Empirical techniques, Analytical techniques. If all five are present, then a code of “5 PCTEA” will indicate this. If you feel the coding for this record is questionable, we welcome discussion around the terms we matched or the way we categorized them. The facet you would expect may not be coded, or a facet may be coded inappropriately. This can also bear on a larger question, of which facets should be treated as defining in construction management research. Please get in touch, and we will look at it. More details here