Insights into earthquake insurance demand in high-risk regions: A case study of Turkey

Abstract

Over the last three decades, earthquakes have caused approximately USD 1 trillion in economic damage globally. While earthquake insurance can help reduce this damage, there is a significant coverage gap, especially in emerging nations. This research focuses on Turkey, a nation with high vulnerability to seismic activity, to investigate the complex reasons for the low adoption of earthquake insurance. Utilizing a comprehensive set of indicators, including socioeconomic factors, real estate data, and earthquake hazards, this study applies multiple linear regression analysis across various districts. The findings reveal that insurance demand is influenced by peak ground acceleration, average household size, crude birth rate, and percentage of college graduates. While conventional factors such as marriage rate and home price per square have some impact, other expected indicators such as population growth and old age dependency do not show significant influence. By demonstrating how demographic, economic, and seismic risk indicators can predict insurance demand, this research offers fresh insights for policymakers and insurers to enhance their coverage strategies. This approach sheds light on the under-examined dynamics of earthquake insurance demand in high-risk regions and suggests a model that can be adjusted for comparable analyses in other emerging markets.