APPLICABILITY OF PARAMETRIC INSURANCE TO THE MAINTENANCE OF INFRASTRUCTURE

Abstract

 The increase of costs for maintaining and renewing infrastructure due to deterioration is a long-standing issue. Especially, it is practically important to secure long-term funds, but there exist uncertainties in the deterioration process of infrastructure, so we cannot ignore the difference between the budget for maintenance and renewal and the actual cost that would increase due to unexpected deterioration. Accordingly, it is indispensable to take measures for reducing the uncertainties in the costs for maintenance and renewal caused by the uncertainties in the deterioration process of infrastructure. In this study, the authors discuss the applicability of infrastructure insurance to the maintenance of infrastructure from the viewpoint of risk finance. In detail, we focus on parametric insurance, which has immediacy and can pay insurance premium immediately after a triggering event happens, predict the deterioration of actual bridges based on inspection data, carry out numerical simulation based on the prediction results, and examine the effects of the insurance.