Tag Archives: Canada

Canada earthquake risk 85 years after the Grand Banks earthquake and tsunami

November 18 marked the 85th anniversary of one of the largest and deadliest earthquakes in Canadian history, one that reiterates the importance of managing all drivers of earthquake risk effectively in the region.

The 1929 Grand Banks earthquake and tsunami was a magnitude 7.2 event that occurred just after 5:00 p.m. NST approximately 155 miles south of Newfoundland and was felt as a far away as New York City and Montreal. The earthquake caused limited damage on land and water, including minor landslides, but triggered a significant tsunami that was recorded as far south as South Carolina and as far east as Portugal.

Sea levels near the Newfoundland coast rose between 6 and 21 feet, with higher amounts recorded locally through narrow bays and inlets, and the tsunami claimed 28 lives. Had this event occurred near a more populated region, such British Columbia or Québec, the impacts could have been much worse.

Figure 1: A home in Newfoundland gets dragged out of a nearby cove following the 1929 Grand Banks earthquake and tsunami. Source: Natural Resources Canada

An event like this shows just how complex the Canadian earthquake risk landscape can be and how important it is to keep that view of risk as up-to-date and accurate as possible. On average, Canada experiences approximately 4,000 earthquakes each year. Most are small, but some can be large, particularly along the west coast near Vancouver and Victoria. There, in what is known as the Cascadia Subduction Zone, the Juan de Fuca plate is sliding underneath North America, causing subduction earthquakes, which tend to be less frequent but more severe than other Canadian seismic sources.

RMS has been modeling Canadian earthquake risk since 1991, with the last model update in 2009. The model inherently or explicitly includes the impacts of nearly all drivers of earthquake damage in that part of the world, from ground shaking, landslides, and liquefaction to fire following.

In building, updating, and validating the model over the years, RMS has collaborated with leading Canadian researchers and engineers, including representatives from what is now known as Natural Resources Canada (NRCan). RMS also maintains strong relationships with key insurance organizations and regulatory bodies, such as the Office of Superintendent of Financial Institutions and the Insurance Bureau of Canada, to play a key role in influencing guidelines and practices throughout the Canadian earthquake market.

The next update to the RMS Canada Earthquake Model is targeted for 2016 as part of a larger RMS North America Earthquake Models update. Among other enhancements, the model will incorporate the latest seismic hazard data (2015), internal research by the RMS seismic hazard development team, and introduce a probabilistic earthquake-induced tsunami model that will include losses from inundation along impacted coastlines.

Together, these updates will reflect the latest view of earthquake hazard in Canada, enabling the market to price and underwrite policies more accurately, and manage earthquake portfolio aggregations more effectively.

Managing the Changing Landscape of Terrorism Risk

RMS has released an updated version of its Probabilistic Terrorism Model, which reflects the considerable changes in terrorism risk for Canada, Denmark, Ireland, Italy, and the U.K. as well as the decreased frequency of large-scale-terrorism events for each of the five countries.

To inform the new view of risk, our scientists carried out a comprehensive analysis of global attack and plot data from the past decade. We focused heavily on large-scale attacks – those with the potential to threaten the solvency of an insurer.

The analysis showed that incidents of large-scale attacks have steadily and significantly decreased, which corresponds with a rise in the funding and sophistication of major intelligence agencies in the west.

Our approach to terrorism modeling follows three principles, which have been validated by data on intercepted plots, past successful attacks, and recent intelligence leaks:

  • Effective terrorists seek to achieve optimal results relative to their effort
  • Their actions are highly rational
  • They are highly constrained by pervasive counter-terrorism measures

Of the estimated 200,000 documents taken or leaked by Edward Snowden, one of the most relevant validations of the RMS model is an N.S.A. presentation that explains the routing of international telecommunications traffic. A very significant proportion of international telecommunications traffic is routed through the U.S. and Europe which, coupled with advances in big data analytics and plummeting data storage costs, has made intelligence collection easier and more robust than it has ever been.

 an N.S.A. PRISM presentation explains the routing of international telecommunications traffic

According to available data on the frequency of plots and attacks, the risk of a large-scale attack has been in decline since 2007, but the risk of smaller-scale attacks perpetrated by lone-wolf operatives and homegrown militants remains high.

However, we have learned over the past decade that terrorism risk levels are fluid and can change quickly. With the rise of the Islamic State in Iraq and reports of its successful recruitment of foreigners, as well as ongoing instability in Afghanistan and Pakistan, the risk outlook can change at any moment.

The RMS Probabilistic Terrorism Model incorporates multiple risk outlooks to provide users with the agility to quickly respond to any changes in terrorism risk. RMS is committed to updating its terrorism model as frequently as necessary to provide the most up-to-date, granular, and accurate view of global terrorism risk.