Research on Weather Index-Based Insurance Method Based on EMW-AHP Algorithm

Extreme-weather events are becoming a crisis for property owners and insurers. The world has endured “more than $1 trillion in damages from more than 1,000 extreme-weather events in recent years.” However, by classifying the risk caused by extreme weather with weather index, weather index-based insurance method can be interesting for both property owners and insurers. This paper investigates the construction of the weather index-based insurance method following the example of two cities that experience extreme weather. This investigation is based on weather situation data form 40 different cities. Furthermore, In this paper, EWM-AHP algorithm is used to process the data, so as to construct the weather index-based insurance method. The results show that the regional weather risk can be divided into four levels according to the weather index calculated by equation given in the insurance method.