In this paper, we develop a methodology to model the risk of losses resulting from a natural disaster in which the intensity parameter of the nonhomogeneous Poisson process has an upward trend and a seasonal component. We apply this model to losses due to floods in the Financial Assistance Program of the Government of Quebec (Canada). We use the historically observed risk premiums to assess the financial costs for the government if it had issued such instruments to hedge risk linked to floods.
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