This paper proposes a warranty system based on a seismic performance agreement, and investigates its feasibility.
Specifically, we focus on making clear to building users the relationship between seismic force and seismic damage or
loss, and propose a warranty agreement in which accountability of seismic loss is defined in terms of ground motion
parameters obtained by a seismic sensor. This study uses the Japan Meteorological Agency seismic intensity scale (I-jma)
because of its general acceptance and recognition. A portfolio of buildings in 10 suburbs of the Kanto region is
chosen for seismic portfolio analysis. The following conclusions were derived:
1. For a portfolio of 10 base-isolated buildings, the builder's seismic expected loss was found to be approximately
2. In regards to feasibility of risk finance by seismic derivatives, this study found that it is possible to transfer most of
builder's risk through a 0.01% premium rate.
3. Builder risk reduction was verified by use of a seismometer.
4. A new contract warranty agreement for seismic loss insurance for users was proposed, and it can reduce the
premium to 1/15 of the current seismic insurance schemes.