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How Earling turns earthquakes risks into a business model?

There are several ways to transfer earthquake risks into business models:

  1. Insurance and reinsurance: One of the most common ways to transfer earthquake risks is through insurance and reinsurance policies. Businesses can purchase insurance policies that provide coverage for damage caused by earthquakes, and insurance companies can transfer some of that risk to reinsurance companies.
  2. Risk-sharing agreements: Businesses can enter into agreements with other companies or organizations to share the risk of an earthquake. For example, a construction company and a property owner may agree to share the cost of any damage caused by an earthquake to a building they are working on.
  3. Hedging: Businesses can use financial instruments such as derivatives, such as options and swaps to hedge against potential losses caused by earthquakes. For example, an oil company may use oil futures contracts to lock in a price for their oil in case of an earthquake that disrupts production.
  4. Risk pools: Businesses can pool their resources together to share the risk of an earthquake. For example, a group of small businesses in a high-risk area may pool their resources to purchase earthquake insurance.
  5. Diversification: Businesses can diversify their operations to spread their risk across different geographic locations and industries. For example, a company with operations in a high-risk area for earthquakes can also invest in operations in a lower-risk area.
  6. Risk transfer through securitization: Businesses can transfer the risk of an earthquake by issuing securities, such as bonds or insurance-linked securities, which are backed by a pool of assets, such as insurance policies. Investors can buy these securities, taking on the risk of an earthquake in exchange for a potential return.

Overall, transferring earthquake risks into business models can help companies to manage and reduce their potential losses, and also provide an opportunity for investors to invest in and benefit from the risk.