Abstract
The frequency and intensity of natural disasters have been increasing signifificantly over the past decades and this trend is predicted to continue. Natural disasters have a dramatic impact on human lives and on the socio-economic welfare of entire regions. They were identifified in 2011 by the World Bank [The World Bank, 2011] as one of the major risks of the East Asia and Pacifific region, which represents 85 percents of all people affected since 2007. Moreover, this exposure will likely double by 2050 due to rapid urbanization and climate change. To understand the magnitude of such disasters, consider Irene, a category 3 hurricane that hit the East Coast of the United States in August 2011. It killed 56 people, inflflicted damages now estimated in the range of 15 billion dollars, and created blackouts that lasted for several days. Hurricane Sandy and the Tohoku tsunami in Japan were even more dramatic, affecting human welfare in entire regions and damaging entire segments of the economy. For instance, Japanese manufacturers lost a signifificant market shares after the tsunami