An earthquake insurance for residential and non-engineered masonry building in Surabaya City

This study presents the valuation of premium of the earthquake insurance based on the new potential earthquake in Surabaya. The potential earthquake is estimated as the recently declared facts that there are two segments of Kendeng fault cross the city. Two types of buildings are considered, the residential and non-engineered masonry buildings, to be the loss due to the earthquake. The loss model found based on the two type of buildings are 3-parameter lognormal distributions. A collective risk model is developed and the premium is calculated based on the expected value principle. The value at risk is also calculated to measure the total potential loss in the city based on the two type of buildings.