Probability of Earthquake Events and Building Damage Ratios: A Framework for Estimating Earthquake Insurance Premiums in Lampung, Indonesia

Sumatra Island is located in the Pacific Ring of Fire, which has resulted in high seismic activity. Several large earthquakes have been recorded in this region. Earthquake hazards lead to loss of life, damage to building infrastructure, losses in production sectors, and cross-sectoral losses. Hazard mitigation is necessary by calculating earthquake insurance premiums to anticipate disaster risks in earthquake-prone areas. This study aims to estimate the value of earthquake insurance premiums in Lampung Province based on the probability of an earthquake occurring at an intensity (SHI), defined as seismic hazard intensity, derived from the peak ground acceleration (PGA) and damage ratio calculations. We compiled multivariate data that can reveal periodic earthquake activity patterns, such as detailed information on earthquake activity over the past three decades and building damage data. The analysis results show that the larger the PGA value, the smaller the SHI value. The average damage ratio for all buildings indicates that the more significant the proportion of severe damage, the higher the average building damage ratio. Residential buildings have the highest estimated pure premium due to the use of simple materials that are highly vulnerable to earthquakes. Understanding these statistical patterns is crucial for comprehensively assessing earthquake disaster threats in the long term. The goal is to enable more effective disaster risk mitigation for frequent earthquake activity in the Lampung Province in the future.