the impact of damage functions used to determine the cat bonds trigger

Seismic risk management is a key factor for reducing the adverse economic impact of devastating earthquakes. hence, hard and soft measures are needed to be combined effectively to increase resistance and resilience against earthquakedisasters. the hard measures include retrofitting and seismic upgrading of existing buildings and construction of safer buildings with improved designs and materials. on the other hand, soft measures can be taken through earthquake insurance and risk transfer security. the fundamental difference between the two methods is that the former reduces the severity of seismic damage physically, while the latter shares the seismic loss with a third-party based on a pre-agreed scheme (goda, 2015).