Walkthrough Method for Catastrophe Decision Making

Abstract

This paper introduces, defines, and exemplifies a walkthrough method for catastrophe decision making within lifeline organizations and for insurers and reinsurers. To meet the needs of lifeline organizations and insurers and reinsurers, this walkthrough method applies to geographically distributed systems such as portfolios and lifeline systems as well as to individual sites. This method has several advantages over other simulation approaches. These include its openness; straightforwardness (or tractability); its straightforward application to problems involving time-series evaluations of changing values of money, changing exposures, hazards, or vulnerabilities; its production of both deterministic (scenario based) and probabilistic results to guide decision making; its complete compatibility with probabilistic hazard methods; and its decided technical advantage of permitting investigators to incorporate key parameters typically ignored in other probabilistic methods. In addition, the walkthrough method readily permits the calculation of nominal confidence levels and limits of risk results produced.