Comprehensive Financial Seismic Risk Assessment of Residential Buildings in Tehran, Iran, Considering Uncertainties

Conducting a comprehensive seismic loss assessment for a distributed portfolio is important in developing effective risk mitigation strategies to ensure financial stability after earthquakes. Recent findings highlight the importance of proper modeling of spatially correlated ground motion values, as well as variabilities in developing exposure and vulnerability models to determine the bounds of expected risk and losses. In this paper, the uncertainties in these factors are evaluated and a probabilistic procedure to capture them in the financial seismic risk assessment is presented. This approach is applicable for estimating various financial seismic loss metrics, including scenario expected loss, scenario upper loss, tail value at risk, and expected annual loss. These metrics can be used by policymakers to develop effective risk mitigation plans and by investors to consider and manage the financial risk of their properties and assets. As a case study, the proposed approach is applied to assess the financial seismic risk of residential buildings in Tehran, Iran. Through this illustrative application, different financial risk metrics are estimated. The outcomes indicated that the western and southern parts of the city have a higher seismic risk.