Multi-start local search procedure for the maximum fire risk insured capital problem

A recently European Commission regulation requires insurance companies to determine the maximum value of insured fire risk policies of all buildings that are partly or fully located within circle of a radius of 200 m. In this work, we present the multi-start local search meta-heuristics that has been developed to solve the real case of an insurance company having more than 400 thousand insured buildings in mainland Portugal. A random sample of the data set was used and the solutions of the meta-heuristic were compared with the optimal solution of a MILP model based on the Maximal Covering Location Problem. The results show the proposed approach to be very efficient and effective in solving the problem.authorsversionpublishe