Abstract
Risk financing for natural disasters is an important management issue in the railway business because of frequent natural disasters such as typhoons and earthquakes in Japan. In this paper, we propose the mathematical model of ruin probability on natural disaster risk finance in the railway business. The model is the quantitative analytical method of the suitable risk finance according to the financial situation and the natural disaster risk peculiar to the respective railways. Furthermore, we also report the statistical evidence based on the restoration expense of losses by natural disasters.
