Property insurance against debris-flow disasters based on risk assessment and the principal-agent theory

Dongchuan City is highly threatened by debris-flow disasters originating from Shengou gully, a typical debris-flow gully along Xiaojiang River in Yunnan Province (Kang et al. 2004). Shengou gully is studied, and a hazard assessment with numerical simulation is developed using ArcGIS 9.2 software. Debris-flow numerical simulation is an important method for predicting debris-flow inundation regions, zoning debris-flow risks, and helping in the design of debris-flow control works. Meanwhile, vulnerability measurement is essential for hazard and risk research. Based on the self-organized map neural network method, we combine the six vulnerability indicators to create an integrated debris-flow vulnerability map that depicts the vulnerability levels of Dongchuan City in Shengou Basin. Based on the risk assessment (including hazard assessment and vulnerability assessment), we adopt the principal-agent theory and use the risk degree of debris flows as an important index to build the insurance model and analyze the insurance premium of debris-flow disasters in Dongchuan City. This paper discusses the model and mechanism of property insurance in debris-flow risk regions and aims to provide technical support for insurance companies to participate in disaster prevention and reduction.