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The occurrence of natural extreme events, such as landslides, floods and particularly earthquakes has been responsible, over the years, for the most devastating effects in terms of human casualties, environmental and economic losses to the modern societies. Among those phenomena, the seismic impact is the one associated to a higher level of damage. In its latest annual report, referring to 2011, the Geneva Association (International Association for the Study of Insurance Economics) confirms this by concluding that in that year, 47% of the losses coming from disasters associated to natural events was due to the occurrence of earthquakes. In 2011, only, the worldwide economic losses due to this natural phenomenon exceeded 220 billion dollars. Furthermore, only around 20% of that amount was insured, which shows how insurers still play a relatively small role in the protection against these phenomena, having focused mainly, in recent years, the level of risk associated with climate change.

Despite the evolution of scientific and technological knowledge, which has contributed decisively to minimize the importance of these effects, recent seismic events have still largely affected vast urban areas, even in developed countries, such as the devastating earthquakes in Japan and New Zealand. Indeed, the Organization for Economic Cooperation and Development (OECD) shows that in many countries the destructive potential has increased greatly in the last three decades, driven by the population growing trend and location of major economic centres in areas of high seismic risk. According to the recent studies of Munich Re, one of the largest reinsurers worldwide, the overall number of events responsible for considerable losses in the last 30 years increased from 400 to 1,000 per year.

The recognition of how inevitable it is that a society is less or more affected by a seismic event demonstrates how important it would be to be able to estimate the amount of resources that would be compromised in the hit region. Accordingly, estimating the human and economic losses, which have been recognized from previous experiences as coming mainly from the partial or total collapse of structures and the damage occurring directly on their main and secondary elements, becomes an obviously necessary task, not only to provide the various social actors with real and objective information but also to support them in establishing response strategies and taking better decisions.

The contribution of a scientific research work aiming to characterize the effects of seismic action proves to be very important to identify the areas, and corresponding building assets, with higher seismic vulnerability, enabling the planning of interventions procedures to improve their seismic safety, after an individual assessment of seismic risk of each structure. This will be particularly interesting to the building owners and to risk assessment organizations, not only for post-event emergency planning but also to appropriately organize and prepare the society resources for the occurrence of an earthquake. Indeed, the impact of extreme natural phenomena depends on several local factors, defined for the country/region in study, such as existing preparedness measures, technical and organizational vulnerabilities, resilience of the society, pre- and postevent behaviour of the affected populations, among others.

The three main social agents clearly and directly interested in such a study are:

• Authorities and public bodies, which can make use of the information regarding economic, human and structural seismic damage to set territory planning policies, interventions on the existing assets and risk assessments for reduction of the economic impact on their budgets;
• General population, as users of the buildings, who will enable a higher level of detail in the assessment of new structures as well as predicting structural reinforcement costs and insurance premiums;
• Risk management entities, such as finance companies, insurers, reinsurers and actuaries, where the detail information and application of appropriate models to the case study is essential to set and adjust the value of its insurance customers, as well as to control risks and losses that may result from their activity.

The Portuguese Government resolution 102/2010, on the adoption of measures to reduce seismic risk, does point towards the estimation of the extent of these concerns and legally legitimates the studies of the seismic impact on Portuguese society.

This study is particularly urgent in Portugal, given the high recurrence of earthquakes events in the country and the absence of a tool capable of responding to current needs and future challenges to the country, when facing the seismic action. The shaking intensity maps for national territory indicate that it is precisely in the areas with higher population density (the South Coast) that stronger earthquakes have been recorded in the past. Such condition, together with the lack of structural vulnerability knowledge on much of the built heritage, leads to the conclusion that the Portuguese population is at considerable risk to earthquakes. Again, the projections of another one of the largest global reinsurers, Swiss Re, are in line with these findings, estimating that the economic impact of a severe seismic event would exceed 25% of GDP, which is aggravated by the fact that the insured amount for this action is quite low (below 10%). In addition, the existing methodologies for assessing the risk seismic, such as HAZUS, the method proposed by the Federal Emergency Management Agency (FEMA), are not suitable to the Portuguese, and European, context by admitting a building taxonomy and structural characterization of the limit states according to the American experience.

Hence, the work to be developed within this project has the main objective of defining an innovative methodology to estimate the financial and human losses correlated to structural damage in buildings, which are grouped in typologies representative of the Portuguese built heritage, according to a given seismic scenario. The development of such tool will require a prior calibration of the parameters needed to characterize and define the general classes of buildings, establishing their capacity and fragility curves from parametric sensitivity studies, allowing, at the same time, the establishment of sustainable future regulations and review of the current ones. At the same time, this project will establish a practical procedure, which will be able to evaluate, through simplified procedures, the risk and losses associated with a structure.

This project will feature the collaboration of the main national research groups in earthquake engineering, of the National Laboratory of Civil Engineering (LNEC) (and of the University of Aveiro (UA)) and the European Centre for Training and Research in Earthquake Engineering (EUCENTRE). The latter will provide the project with the latest European trends in earthquake loss assessment, as well as with an international perspective, given that the EUCENTRE hosts the Global Earthquake Model (GEM) initiative, which is developing a global, worldwide seismic hazard and risk model.

For the estimation of financial losses, which are currently computed based on taxable value, featuring no distinction according to the type of building, the project will collaborate with the Construction Department, at FEUP. This unit has accumulated know-how in estimating the repair costs of construction elements, through the project ProNIC (Protocol for the Standardization of Technical Information on Construction). The procedures developed under the ProNIC framework will be adjusted based on new studies in order to update the cost estimates for typical structural and non-structural damage caused by earthquakes.

This project will also involve also the Portuguese Association of Insurers, which will connect the concerns of its associates with the work plan and simultaneously validate the proposed procedures at various stages of this project. Insurers play a key role in the study and minimize risk by collaborating with the people and local organism or national governments. Specifically, insurance agents can contribute with their expertise in risk management and disaster modelling, economic incentives to discourage construction in high-risk areas or with collection of data on the cost of extreme events.

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