Tag Archives: Natural Catastrophe

Friday 13th and the Long-Term Cost of False Alarms

If the prospect of flooding along the East Coast of England earlier this month was hard to forecast, the newspaper headlines the next day were predictable enough:

Floods? What floods? Families’ fury at evacuation order over storm surge … that never happened (Daily Mail)

East coast residents have derided the severe storm warnings as a ‘load of rubbish’ (The Guardian)

Villagers shrug off storm danger (The Times)

The police had attempted an evacuation of some communities and the army was on standby. This was because of warnings of a ‘catastrophic’ North Sea storm surge on January 13 for which the UK Environment Agency applied the highest level flood warnings along parts of the East Coast: ‘severe’ which represents a danger to life. And yet the flooding did not materialize.

Water levels were 1.2m lower along the Lincolnshire coast than those experienced in the last big storm surge flood in December 2013, and 0.9m lower around the Norfolk towns of Great Yarmouth and Lowestoft. Predicting the future in such complex situations, even very near-term, always has the potential to make fools of the experts. But there’s a pressure on public agencies, knowing the political fallout of missing a catastrophe, to adopt the precautionary principle and take action. Imagine the set of headlines, and ministerial responses, if there had been no warnings followed by loss of life.

Interestingly, most of those who had been told to evacuate as this storm approached chose to stay in their homes. One police force in Essex, knocked on 2,000 doors yet only 140 of those people registered at an evacuation centre. Why did the others ignore the warnings and stay put? Media reports suggest that many felt this was another false alarm.

The precautionary principal might seem prudent, but a false alarm forecast can encourage people to ignore future warnings. Recent years offer numerous examples of the consequences.

The Lessons of History

Following a 2006 Mw8.3 earthquake offshore from the Kurile Islands, tsunami evacuation warnings were issued all along the Pacific coast of northern Japan, where the tsunami that did arrive was harmless. For many people that experience weakened the imperative to evacuate after feeling the three-minute shaking of the March 2011 Mw9 earthquake, following which 20,000 people were drowned by the tsunami. Based on the fear of what happened in 2004 and 2011, today tsunami warnings are being ‘over-issued’ in many countries around the Pacific and Indian Oceans.

For the inhabitants of New Orleans, the evacuation order issued in advance of Hurricane Ivan in December 2004 (when one third of the city’s population moved out, while the storm veered away), left many sceptical about the mandatory evacuation issued in advance of Hurricane Katrina in August 2005 (after which around 1500 drowned).

Agencies whose job it is to forecast disaster know only too well what happens if they don’t issue a warning as any risk looms. However, the long-term consequences from false alarms are perhaps not made explicit enough. While risk models to calculate the consequence are not yet available, a simple hypothetical calculation illustrates the basic principles of how such a model might work:

  • the chance of a dangerous storm surge in the next 20 years is 10 percent, for a given community;
  • if this happens, then let’s say 5,000 people would be at grave risk;
  • because of a recent ‘false’ alarm, one percent of those residents will ignore evacuation orders;
  • thus the potential loss of life attributed to the false alarm is five people.

Now repeat with real data.

Forecasting agencies need a false alarm forecast risk model to be able to help balance their decisions about when to issue severe warnings. There is an understandable instinct to be over cautious in the short-term, but when measured in terms of future lives lost, disaster warnings need to be carefully rationed. And that rationing requires political support, as well as public education.

[Note: RMS models storm surge in the U.K. where the risk is highest along England’s East Coast – the area affected by flood warnings on January 13. Surge risk is complex, and the RMS Europe Windstorm Model™ calculates surge losses caused by extra-tropical cyclones considering factors such as tidal state, coastal defenses, and saltwater contamination.]

After the devastating 2015 earthquake how is Nepal recovering?

It’s more than 20 months since a magnitude 7.8 earthquake hit Nepal in April 2015, swiftly followed by another earthquake of magnitude 7.3 the next month.

Nearly 9,000 people died. More than 600,000 houses were destroyed and around 290,000 were damaged, according to the United Nations.

On the face of it local people now appear to be getting on with life as normal but look closer and reminders of the disaster are never far away. Whether it be a snaking crack in a wall, large enough to put an arm through – or the still air now taking the space where temples once stood.

International donors have pledged some $4 billion following the earthquake but this is yet to produce the required progress in Nepal’s rebuilding or significantly improve the life of people on the ground.

Framing of a schoolhouse in village hit by earthquake

The scale of the damage is huge and the reconstruction costs – to a country already poor – are overwhelming. The challenge is to rebuild in a way that makes Nepal more resilient to future earthquakes which, in such a seismically active region, are more a question of ‘when’ not ‘if’.

The capital, Kathmandu, wasn’t affected as badly as many feared but as you head out into the hills you see conditions deteriorate considerably. Partially collapsed buildings and piles of rubble are a common sight. Rural Nepalese houses normally consist of three stories, with the first used for livestock, the second for living and the third for agricultural use. These tall buildings are made from heavy and brittle materials, typically stone and mud mortar, which produce a vulnerability to earthquake to match that in many other regions of the world.

Earthquake damage to a traditional three-story house

Recently I saw the damage for myself. Along with four of my RMS colleagues, I travelled to Nepal to support Build Change’s work to strengthen the resilience of rural communities. It’s an organization focussed on helping people in developing countries make their homes and schools better able to withstand earthquakes and hurricanes.

Immediately after the 2015 Nepal earthquake it deployed teams to the affected areas to perform surveys of the damage and validate engineering assumptions as to why some buildings remain standing when others had collapsed.

Build Change’s site engineers oversaw the retrofitting and rebuilding work carried out by local builders who themselves had been trained by Build Change. Being scientists and engineers, the RMS team was impressed to see the high quality of workmanship and design, the positive response of Build Change’s staff to our suggestions for incremental improvements – as well as the engagement of the wider community.

RMS and Build Change staff advise on house retrofitting

And on a personal level, it was this community which made an especially powerful impression on me. Kindness and generosity were shown by the Nepalese who have been hit so hard, yet are so willing to share – we were routinely offered food by the local people who were so interested to know why there are foreigners in their village. Perhaps they took hope from seeing that they hadn’t been forgotten.

Money is not abundant in Nepal, but the engineering expertise is developing. And along with this expertise there is more than enough human grit and determination among the Nepalese people to rebuild their country stronger.

The Cost of Shaking in Oklahoma: Earthquakes Caused by Wastewater Disposal

It was back in 2009 that the inhabitants of northern Oklahoma first noticed the vibrations. Initially only once or twice a year, but then every month, and even every week. It was disconcerting rather than damaging until November 2011, when a magnitude 5.6 earthquake broke beneath the city of Prague, Okla., causing widespread damage to chimneys and brick veneer walls, but fortunately no casualties.

The U.S. Geological Service had been tracking this extraordinary outburst of seismicity. Before 2008, across the central and eastern U.S., there were an average of 21 earthquakes of magnitude three or higher each year. Between 2009-2013 that annual average increased to 99 earthquakes in Oklahoma alone, rising to 659 in 2014 and more than 800 in 2015.


During the same period the oil industry in Oklahoma embarked on a dramatic expansion of fracking and conventional oil extraction. Both activities were generating a lot of waste water. The cheapest way of disposing the brine was to inject it deep down boreholes into the 500 million year old Arbuckle Sedimentary Formation. The volume being pumped there increased from 20 million barrels in 1997 to 400 million barrels in 2013. Today there are some 3,500 disposal wells in Oklahoma State, down which more than a million barrels of saline water is pumped every day.

It became clear that the chatter of Oklahoma earthquakes was linked with these injection wells. The way that raising deep fluid pressures can generate earthquakes has been well-understood for decades: the fluid ‘lubricates’ faults that are already poised to fail.

But induced seismicity is an issue for energy companies worldwide, not just in the South Central states of the U.S.. And it presents a challenge for insurers, as earthquakes don’t neatly label themselves ‘induced’ and ‘natural.’ So their losses will also be picked up by property insurers writing earthquake extensions to standard coverages, as well as potentially by the insurers covering the liabilities of the deep disposal operators.

Investigating the Risk

Working with Praedicat, which specializes in understanding liability risks, RMS set out to develop a solution by focusing first on Oklahoma, framing two important questions regarding the potential consequences for the operators of the deep disposal wells:

  • What is the annual risk cost of all the earthquakes with the potential to be induced by a specific injection well?
  • In the aftermath of a destructive earthquake how could the damage costs be allocated back to the nearby well operators most equitably?

In Oklahoma detailed records have been kept on all fluid injection activities: well locations, depths, rates of injection. There is also data on the timing and location of every earthquake in the state. By linking these two datasets the RMS team was able to explore what connects fluid disposal with seismicity. We found, for example, that both the depth of a well and the volume of fluid disposed increased the tendency to generate seismic activity.

Earthquakes in the central U.S. are not only shallow and/or human-induced. The notorious New Madrid, Mo. earthquakes of 1811-1812 demonstrated the enormous capacity for ‘natural’ seismicity in the central U.S., which can, albeit infrequently, cause earthquakes with magnitudes in excess of M7. However, there remains the question of the maximum magnitude of an induced earthquake in Oklahoma. Based on worldwide experience the upper limit is generally assumed to be magnitude M6 to 6.5.

Who Pays – and How Much?

From our studies of the induced seismicity in the region, RMS can now calculate the expected total economic loss from potential earthquakes using the RMS North America Earthquake Model. To do so we run a series of shocks, at quarter magnitude intervals, located at the site of each injection well. Having assessed the impact at a range of different locations, we’ve found dramatic differences in the risk costs for a disposal well in a rural area in contrast to a well near the principal cities of central Oklahoma. Reversing this procedure we have also identified a rational and equitable process which could help allocate the costs of a damaging earthquake back to all the nearby well operators. In this, distance will be a critical factor.

Modeling Advances for Manmade Earthquakes

For carriers writing US earthquake impacts for homeowners and businesses there is also a concern about the potential liabilities from this phenomenon. Hence, the updated RMS North America Earthquake Model, to be released in spring 2017, will now include a tool for calculating property risk from induced seismicity in affected states: not just Oklahoma but also Kansas, Ohio, Arkansas, Texas, Colorado, New Mexico, and Alabama. The scientific understanding of induced seismicity and its consequences are rapidly evolving, and RMS scientists are closely following these developments.

As for Oklahoma, the situation is becoming critical as the seismic activity shows no signs of stopping: a swarm of induced earthquakes has erupted beneath the largest U.S. inland oil storage depot at Cushing and in September 2016 there was a moment magnitude 5.8 earthquake located eight miles from the town of Pawnee – which caused serious damage to buildings. Were a magnitude 6+ earthquake to hit near Edmond (outside Oklahoma City) our modeling shows it could cause billions of dollars of damage.

The risk of seismicity triggered by the energy industry is a global challenge, with implications far beyond Oklahoma. For example Europe’s largest gas field, in the Netherlands, is currently the site of damaging seismicity. And in my next blog, I’ll be looking at the consequences.

[For a wider discussion of the issues surrounding induced seismicity please see these Reactions articles, for which Robert Muir-Wood was interviewed.]

Indonesia’s Protection Gap – How the Sumatra Earthquake Shows that Coverage Must Spread

On December 7, 2016, a shallow magnitude 6.5 earthquake struck northern Sumatra in Indonesia, severely damaging or destroying more than ten thousand homes and many businesses, as well as causing over a hundred deaths. The disaster struck a poorer area away from the major cities, where the standards of building design, construction methods, and material quality are not sufficient to withstand such an earthquake.


USGS Shake map for Mw 6.5 Earthquake

We have up-to-date research on local building design and construction practices in Indonesia, which we have incorporated into the latest version of the RMS® Indonesia Earthquake Model. This research was done last year when members of the RMS vulnerability team, including me, visited southeast Asia as part of the process to update the model. We held workshops with local earthquake engineering experts who practice there, and attended an earthquake engineering conference, as well as visiting commercial and industrial buildings, including those under construction, to see first-hand how they were designed and built.


A workshop with local experts


International Conference – Jogja Earthquake in Reflection (May, 2016)

This on-the-ground research provided insights into Indonesia’s rules and practices around construction, seismic design, code enforcement, as well as information on the relative quantities of different types of buildings in the country. We discovered significant differences between mainstream construction and those buildings covered by earthquake insurance, namely:

  • Past earthquakes have demonstrated that single family dwellings and/or low rise buildings are the most vulnerable building types compared to those built for commercial and industrial use, because of a lack of engineering design, poor construction, and lower material quality.
  • Buildings outside of major cities are mostly low rises and they may not be designed for earthquake risk.
  • Major cities such as Jakarta, Bandung, and Surabaya enforce a strict structural design review process for the construction of mid- and high-rise buildings.
  • Insurance penetration rates are higher for commercial and industrial buildings in and near major cities, with much lower penetration for residential properties in rural areas.

It’s perhaps not surprising that if poorer communities have less insurance protection, that they also cannot afford to invest in the higher quality construction that is designed to better withstand earthquakes. This is one of the primary reasons for the ‘protection gap’. As these countries become more developed, there’s the potential for that gap to start closing. In fact, Indonesia is one of the fastest growing economies in southeast Asia, with the property insurance and (re)insurance market expanding rapidly.

But as the earthquake disaster demonstrated, there are still many poorer regions with low insurance penetration which are also prone to repeated natural disasters. Sadly, there is still a long way to go before people in those places benefit from the resilience in their built environment which other, richer parts of the world may take for granted.

Exceedance 2017 Is Coming to New Orleans!

Welcome to the first in a series of blogs leading up to Exceedance 2017, March 20-23.

We’re looking forward to the event, which will be held at the Hyatt Regency New Orleans. Situated less than a mile from the historic French Quarter, and about a mile-and-a-half from Jackson Square, it’s a great location in the heart of the ‘Big Easy.’

This year’s theme, ‘Create Resilience,’ reflects the strength and spirit of New Orleans, including the tremendous progress made in the ten years since the devastation caused by Hurricane Katrina. Exceedance 2017 will emphasize how innovation, analytics, and ingenuity can create more resilience in our global catastrophe risk management practices.

Hands-On Training for Risk Modeler on the RMS(one) Platform and Version 17

With the release of Risk Modeler on the RMS(one)® platform and Version 17 upcoming in April, this year’s Exceedance schedule is focused on training and enablement. It’s the only place to get key insights into these new RMS releases – and be trained to assess risk more effectively.

Exceedance2017Exceedance will feature over 22 speakers and provide many opportunities to dive deep into more than 20 new models, including North America Earthquake, North Atlantic Hurricane, and major advances in science, software, and HD-simulation models.

The agenda is designed to provide attendees with all the information they need for our new solutions developed for a rapidly changing market. Solutions that will increase operational effectiveness, agility, resilience, and business growth.

Take Some Time to Have Some Fun

Along with experiencing all there is to see and learn at Exceedance, there are plenty of opportunities to relax and have some fun with the following pre-conference activities:

Golf at TPC Louisiana: Enjoy a round at TPC Louisiana, rated one of Golfweek’s “Best Courses You Can Play.” It’s a great place for you and your colleagues to experience a one-of-a-kind day on a championship golf course.

Tour the Lower 9th Ward: Join the Make It Right Foundation for a walking tour of the Lower 9th Ward. You’ll experience first-hand how innovative partnerships and community-led design sessions are transforming the neighborhood that was most devastated by Hurricane Katrina.

Horse-Drawn Carriage Ride and Cooking Class: Journey through the French Quarter by carriage, where you’ll pass through the city’s eighteenth- and nineteenth-century French and Spanish architecture. Then, satisfy your appetite with chef extraordinaire Amy Sins who will guide you through an interactive culinary experience that ends with a delectable meal.

Spirits and Spirits – an Evening Tour: Take a guided evening stroll through the spooky side of the old French Quarter. You’ll hear tales from the city’s storied history, and perhaps even encounter a ghost or two. Then enjoy local cocktail favorites at one of New Orleans’s oldest restaurants, a former Spanish armory.

To learn more about these events, visit the Exceedance website. If you’re ready to register, fill out your form.

Exceedance will be here soon, so look for our next blog in two weeks. It will include the latest information on the session tracks and content, as well as details of the keynote speakers.

“Italy is Stronger than any Earthquake”

Those were the words of the then Italian Prime Minister, Matteo Renzi, in the aftermath of two earthquakes on the same day, October 26, 2016. As a statement of indomitable defiance at a scene of devastation it suited the political and public mood well. But the simple fact is there is work to do, because Italy is not as strong as it could be in its resilience to earthquakes.

There’s a long history of powerful seismic activity in the central Apennines: only recently we’ve seen L’Aquila (2009, Mw6.3), Amatrice (August 2016, Mw6.0), two earthquakes in the area near Visso (October 2016, Mw 5.4 and 5.9) and Norcia (October 2016, Mw6.5). These have resulted in hundreds of fatalities, mainly attributed to widespread collapse of old buildings, emphasizing that earthquakes don’t kill people – buildings do. Whilst Italy’s Civil Protection Department provides emergency management and support after earthquakes, there is too little insurance help for the financial resiliency of the communities most affected by all these events. While the oft-repeated call for earthquake insurance to be compulsory continues to be politically unobtainable, one way it could be spread more widely is through effective modeling. And RMS expertise can help with this, allowing the market to better understand the risk and so build resilience.

Examining High Building Fragility

The two most significant factors for earthquake risk in Italy are (i) construction materials and (ii) the age of the buildings. The majority of the damaged and destroyed buildings were made from unreinforced masonry, and built prior to the introduction of the most recent seismic design and building codes, making them particularly susceptible. With the RMS® Europe Earthquake model capturing both the variations in construction types and age, as well as other vulnerability factors, (re)insurers can accurately reflect the response of different structures to earthquakes.  This allows the models to be used to evaluate the cost benefits of retrofitting buildings.  RMS has worked with the Italian National Institute for Geophysics and Volcanology (INGV) to see how such analyses could be used to optimize the allocation of public funds for strengthening older buildings, thereby reducing future damage and costs.

Seismic Risk Assessment

The high-risk zone of the central Apennines is described well by probabilistic seismic hazard assessment (PSHA) maps, which show the highest risks in that region resulting from the movement of tectonic blocks that produce the extensional, ‘normal’ faulting observed. The maps also show earthquake risk throughout the rest of Italy. RMS worked with researchers from INGV to develop our view of risk in 2007, based on the latest available databases at that time, including active faults and earthquake catalogs. The resulting hazard model produces a countrywide view of seismic hazard that has not been outdated by newer studies, such as the 2009 INGV Seismic Hazard Map and the 2013 European Seismic Hazard Map published by the SHARE consortium, as shown below:


The Route to Increased Resiliency

Increasing earthquake resiliency in Italy should also involve further development of the private insurance market. The seismic risk in Italy is relatively high for western Europe, whilst the insurance penetration is low, even outside the central Apennines. For example, in 2012, there were two large earthquakes in the Emilia-Romagna region of the Po valley, where there are higher concentrations of industrial and commercial risks. Although the type of faults and risks vary by region, such as the potential impact of liquefaction, the RMS model captures such variations in risk and can be used for the development of risk-based pricing and products for the expansion of the insurance market throughout the country.

Whilst Italy’s seismic events in October caused casualties on a lesser scale than might have been, the extent of the damage highlights once again the prevalence of earthquake risk. It is only a matter of time before the next disaster strikes, either in the Central Apennines or elsewhere. When that happens, the same questions will be asked about how Italy could be made more resilient. But if, by then, the country’s building stock is being made less susceptible and the private insurance market is growing markedly, then Italy will be able to say, with justification, it is becoming stronger than any earthquake.

Earthquake Hazard: What Has New Zealand’s Kaikoura Earthquake Taught Us So Far?

The northeastern end of the South Island is a tectonically complex region with the plate motion primarily accommodated through a series of crustal faults. On November 14, as the Kaikoura earthquake shaking began, multiple faults ruptured at the same time culminating in a Mw 7.8 event (as reported by GNS Science).

The last two weeks have been busy for earthquake modelers. The paradox of our trade is that while we exist to help avoid the damage this natural phenomenon causes, the only way we can fully understand this hazard is to see it in action so that we can refine our understanding and check that our science provides the best view of risk. Since November 14 we have been looking at what Kaikoura tells us about our latest, high-definition New Zealand Earthquake model, which was designed to handle such complex events.

Multiple-Segment Ruptures

With the Kaikoura earthquake’s epicenter at the southern end of the faults identified, the rupture process moved from south to north along this series of interlinked faults (see graphic below). Multi-fault rupture is not unique to this event as the same process occurred during the 2010 Mw 7.2 Darfield Earthquake. Such ruptures are important to consider in risk modeling as they produce events of larger magnitude, and therefore affect a larger area, than individual faults would on their own.

Map showing the faults identified by GNS Sciences as experiencing surface fault rupture in the Kaikoura Earthquake.
Source: http://info.geonet.org.nz/display/quake/2016/11/16/Ruptured +land%3A+observations+from+the+air

In keeping with the latest scientific thinking, the New Zealand Earthquake HD Model provides an expanded suite of events that represent complex ruptures along multiple faults. For now, these are included only for areas of high slip fault segments in regions with exposure concentrations, but their addition increases the robustness of the tail of the Exceedance Probability curve, meaning clients get a better view of the risk of the most damaging, but lower probability events.

Landsliding and Liquefaction

While most property damage has been caused directly by shaking, infrastructure has been heavily impacted by landsliding and, to a lesser extent, liquefaction. Landslides and slumps have occurred across the region, most notably over Highway 1, an arterial route. The infrastructure impacts of the Kaikoura earthquake are a likely dress rehearsal for the expected event on the Alpine Fault. This major fault runs 600 km along the western coast of the South Island and is expected to produce an Mw 8+ event with a probability of 30% in the next 50 years, according to GNS Science.

As many as 80 – 100,000 landslides have been reported in the upper South Island, with some creating temporary dams over rivers and in some cases temporary lakes (see below). These dams can fail catastrophically, sending a sudden increase of water flow down the river.



Examples of rivers blocked by landslides photographed by GNS Science researchers.

Source: http://info.geonet.org.nz/display/quake/2016/11/18/ Landslides+and+Landslide+dams+caused +by+the+Kaikoura+Earthquake









Liquefaction occurred in discrete areas across the region impacted by the Kaikoura earthquake. The Port of Wellington experienced both lateral and vertical deformation likely due to liquefaction processes in reclaimed land. There have been reports of liquefaction near the upper South Island towns (Blenheim, Seddon, Ward), but liquefaction will not be a driver of loss in the Kaikoura event to the extent it was in the Christchurch earthquake sequence.

RMS’ New Zealand Earthquake HD Model includes a new liquefaction component that was derived using the immense amount of new borehole data collected after the Canterbury Earthquake Sequence in 2010-2011. This new methodology considers additional parameters, such as depth to the groundwater table and soil-strength characteristics, that lead to better estimates of lateral and vertical displacement. The HD model is the first probabilistic model with a landslide susceptibility component for New Zealand.


The Kaikoura Earthquake generated tsunami waves that were observed in Kaikoura at 2.5m, Christchurch at 1m, and Wellington at 0.5m. The tsunami waves arrived in Kaikoura significantly earlier than in Christchurch and Wellington indicating that the tsunami was generated near Kaikoura. The waves were likely generated by offshore faulting, but also may be associated with submarine landsliding. Fortunately, the scale of the tsunami waves did not produce significant damage. RMS’ latest New Zealand Earthquake HD Model captures tsunami risk due to local ocean bottom deformation caused by fault rupture, and is the first model in the New Zealand market to do this, that is built from a fully hydrodynamic model.

Next Generation Earthquake Modeling at RMS

Thankfully the Kaikoura earthquake seems to have produced damage that is lower than we might have seen had it hit a more heavily populated area of New Zealand with greater exposures – for detail on damage please see my other blog on this event.

But what Kaikoura has told us is that our latest HD model offers an advanced view of risk. Released only in September 2016, it was designed to handle such a complex event as the Kaikoura earthquake, featuring multiple-segment ruptures, a new liquefaction model at very high resolution, and the first landslide susceptibility model for New Zealand.

New Zealand’s Kaikoura Earthquake: What Have We Learned So Far About Damage?

The Kaikoura Earthquake of November 14 occurred in a relatively low population region of New Zealand, situated between Christchurch and Wellington. The largest town close to the epicentral region is Blenheim, with a population near 30,000.

Early damage reports indicate there has been structural damage in the northern part of the South Island as well as to numerous buildings in Wellington. While most of this has been caused directly by shaking, infrastructure and ports across the affected region have been heavily impacted by landsliding and, to a lesser extent, liquefaction. Landslides and slumps have occurred across the northeastern area of the South Island, most notably over Highway 1, severing land routes to Kaikoura – a popular tourist destination.

The picture of damage is still unfolding as access to badly affected areas improves. At RMS we have been comparing what we have learned from this earthquake to the view of risk provided by our new, high-definition New Zealand Earthquake model, which is designed to improve damage assessment and loss quantification at location-level resolution.

No Damage to Full Damage

The earthquake shook a relatively low population area of the South Island and, while it was felt keenly in Christchurch, there have been no reports of significant damage in the city. The earthquake ruptured approximately 150 km along the coast, propagating north towards Wellington. The capital experienced ground shaking intensities at the threshold for damage, producing façade and internal, non-structural damage in the central business district. Although the shaking intensities were close to those experienced during the Cook Strait sequence in 2013, which mostly affected short and mid-rise structures, the longer duration and frequency content of the larger magnitude Kaikoura event has caused more damage to taller structures which have longer natural periods.

From: Wellington City Council

Within Wellington, cordons are currently in place around a few buildings in the CBD (see above) as engineers carry out more detailed inspections. Some are being demolished or are set to be, including a nine-story structure on Molesworth Street and three city council buildings. It should be noted that most of the damage has been to buildings on reclaimed land close to the harbor where ground motions were likely amplified by the underlying sediments.

From: http://www.stuff.co.nz/national/86505695/quakehit-wellington-building-at-risk-of-collapse-holds-up-overnight; The building on Molesworth street before the earthquake (L) and on Tuesday (R).

From: http://www.stuff.co.nz/national/86505695/quakehit-wellington-building-at-risk-of-collapse-holds-up-overnight; The building on Molesworth street before the earthquake (L) and after on November 16 (R).

Isolated incidences of total damage in an area of otherwise minor damage demonstrate why RMS is moving to the new HD financial modeling framework. The RMS RiskLink approach applies a low mean damage ratio across the area, whereas RMS HD damage functions allow for zero or total loss – as well as a distribution in between which is sampled for each event for each location. The HD financial modeling framework is able to capture a more realistic pattern of gross losses.

Business Interruption

The Kaikoura Earthquake will produce business interruption losses from a variety of causes such as direct property or content damages, relocation costs, or loss of access to essential services (i.e. power and water utilities, information technology) that cripple operations in otherwise structurally sound buildings. How quickly businesses are able to recover depends on how quickly these utilities are restored. Extensive landslide damage to roads means access to Kaikoura itself will be restricted for months. The New Zealand government has announced financial assistance packages for small business to help them through the critical period immediately after the earthquake. Similar assistance was provided to businesses in Christchurch after the Canterbury Earthquake Sequence in 2010-2011.

That earthquake sequence and others around the world have provided valuable insights on business interruption, allowing our New Zealand Earthquake HD model to better capture these impacts. For example, during the Canterbury events, lifelines were found to be repaired much more quickly in urban areas than in rural areas, and areas susceptible to liquefaction were associated with longer down times due to greater damage to underground services. The new business interruption model provides a more accurate assessment of these risks by accounting for the influence of both property and contents damage as well as lifeline downtime.

It remains to be seen how significant any supply chain or contingent business interruption losses will be. Landslide damage to the main road and rail route from Christchurch to the inter-island ferry terminal at Picton has disrupted supply routes across the South Island. Alternative, longer routes with less capacity are available.

Next Generation Earthquake Modeling at RMS

RMS designed the update to its New Zealand Earthquake High Definition (HD) model, released in September 2016, to enhance location-level damage assessment and improve the gross loss quantification with a more realistic HD financial methodology. The model update was validated with billions of dollars of claims data from the 2010-11 Canterbury Earthquake Sequence.

Scientific and industry lessons learned following damaging earthquakes such as last month’s in Kaikoura and the earlier event in Christchurch increase the sophistication and realism of our understanding of earthquake risk, allowing communities and businesses to shift and adapt – so becoming more resilient to future catastrophic events.

Shrugging Off a Hurricane: A Three Hundred Year Old Culture of Disaster Resilience

If a global prize was to be awarded to the city or country that achieves the peak of disaster resilience, Bermuda might be a fitting first winner.

This October’s Hurricane Nicole made direct landfall on the island. The eyewall tracked over Bermuda with maximum measured windspeeds close to 120 mph. Nonetheless there were there were no casualties. The damage tally was principally to fallen trees, roadway debris, some smashed boats and many downed utility poles. The airport opened in 24 hours, with the island’s ferries operating the following day.

Bermuda’s performance through Nicole was exemplary. What’s behind that?

Since its foundation in 1609 when 150 colonists and crew were shipwrecked on the island, Bermuda has got used to its situation at the heart of hurricane alley. Comprising 21 square miles of reef and lithified dunes, sitting out in the Atlantic 650 miles west of Cape Hatteras, a hurricane hits the island on average once every six or seven years. Mostly these are glancing blows, but once or twice a century Bermuda sustains direct hits at Category 3 or 4 intensity. Hurricane Fabian in 2003 was the worst of the recent storms, causing $300 million of damage (estimated to be worth $650 million, accounting for today’s higher prices and greater property exposure). The cost of the damage from Hurricane Gonzalo in 2014 was about half this amount.

How did Bermuda’s indigenous building style come to adopt such a high standard of wind resistance? It seems to go back to a run of four hurricanes at the beginning of the 18th Century. First, in September 1712 a hurricane persisted for eight hours destroying the majority of wooden buildings. Then twice in 1713 and again more strongly in 1715 the hurricane winds ruined the newly rebuilt churches. One hurricane can seem like an exception, four becomes a trend. In response, houses were constructed with walls of massive reef limestone blocks, covered by roofs tiled with thick slabs of coral stone: traditional house styles that have been sustained ever since.

The frequency of hurricanes has helped stress test the building stock, and ensure the traditional construction styles have been sustained. More recently there has been a robust and well-policed building code to ensure adequate wind resistance for all new construction on the island.

Yet resilience is more than strong buildings. It also requires hardened infrastructure, and that is where Bermuda has some room for improvement. Still dependent on overhead power lines, 90 percent of the island’s 27,000 houses lost power in Hurricane Nicole – although half of these had been reconnected by the following morning and the remainder through that day. Mobile phone and cable networks were also back in operation over a similar timescale. Experience of recent hurricanes has ensured an adequate stockpile of cable and poles.

Expert Eyes on the Island

It helps that there is an international reinsurance industry on the island, with many specialists in the science of hurricanes and the physics and engineering of building performance on hand to scrutinize the application of improved resilience. Almost every building is insured, giving underwriters oversight of building standards. Most importantly, the very functioning of global reinsurance depends on uninterrupted connection with the rest of the world, as well as ensuring that on-island staff are not distracted by having to attend to their family’s welfare.

Bermuda’s experience during Nicole would merit the platinum standard of resilience adopted by the best businesses: that all functions can be restored within 72 hours of a disaster. The Bermuda Business Development Agency and the Association of Bermuda Insurers and Reinsurers were fulsome in their praise for how the island had withstood the hurricane. The strong and widely-owned culture of preparedness, reflects the experience of recent storms like Gonzalo and Fabian.

Stephen Weinstein, general counsel at RenaissanceRe, commented “It’s remarkable that one day after a major hurricane strike, Bermuda is open for business, helping finance disaster risk worldwide, and poised to welcome back business visitors and vacationers alike.”

In early 2017, RMS will issue an update to Bermuda wind vulnerability in the version 17 software release as part of a broader update to the 33 islands and territories covered by the North Atlantic Hurricane Models. Updates to Bermuda vulnerability will consider past hurricane observations and the latest building code research.

The Cure for Catastrophe?

On August 24, 2016 – just a few weeks ago – an earthquake hit a remote area of the Apennine mountains of central Italy in the middle of the night. Fewer than 3000 people lived in the vicinity of the strongest shaking. But nearly 1 in 10 of those died when the buildings in which they were sleeping collapsed.

This disaster, like almost all disasters, was squarely man-made. Manufactured by what we build and where we build it; or in more subtle ways – by failing to anticipate what will one day inevitably happen.

Italy has some of the richest and best researched disaster history of any country, going back more than a thousand years. The band of earthquakes that runs through the Apennines is well mapped – pretty much this exact same earthquake happened in 1639. If you were identifying the highest risk locations in Italy, these villages would be on your shortlist. So in the year 2016, 300 people dying in a well-anticipated, moderate-sized earthquake, in a rich and highly-developed country, is no longer excusable.

Half the primary school in the town of Amatrice collapsed in the August 24th earthquake. Very fortunately, it being the middle of the night, no children were in class. Four years before, €700,000 had been spent to make the school “earthquake proof.” An investigation is now underway to see why this proofing failed so spectacularly. If only Italy was as good at building disaster resilience as mobilizing disaster response: some 7000 emergency responders had arrived after the earthquake – more than twice as many as those who lived in the affected villages.

The unnatural disaster

When we look back through history and investigate them closely we find that many other “natural disasters” were, in their different ways, also man-made.

The city of Saint-Pierre on the island of Martinique was once known as the “little Paris of the Caribbean.” In 1900 it had a population of 26,000, with tree-lined streets of balconied two and three story houses. From the start of 1902 it was clear the neighbouring volcano of Mont Pelée was heading towards an eruption. The island’s governor convened a panel of experts who concluded Saint-Pierre was at no risk because the valleys beneath the volcano would guide the products of any eruption directly into the sea. As the tremors increased, the Governor brought his family to Saint-Pierre to show the city was safe, and therefore, likely all but one of the city’s inhabitants, died when the eruption blasted sideways out of the volcano. There are some parallels here with the story of those 20,000 people drowned in the 2011 Japanese tsunami, many of whom had assumed they would be protected by concrete tsunami walls and therefore did not bother to escape while they still had time. We should distrust simple notions of where is safe, based only on some untested theory.

Sometimes the disaster reflects the unforeseen consequence of some manmade intervention. In Spring 1965, the U.S. Army Corps of Engineers completed the construction of a broad shipping canal – known as the Mississippi River Gulf Outlet (“Mr Go”) linking New Orleans with the Gulf of Mexico. Within three months, a storm surge flood driven by the strong easterly winds ahead of Hurricane Betsy was funnelled up Mr Go into the heart of the city. Without Mr Go the city would not have flooded. Four decades later Hurricane Katrina performed this same trick on New Orleans again, only this time the storm surge was three feet higher. The flooding was exacerbated when thin concrete walls lining drainage canals fell over without being overtopped. Channels meant for pumping water out of the city reversed their intended function and became the means by which the city was inundated.

These were fundamental engineering and policy failures, for which many vulnerable people paid the price.


My new book, “The Cure for Catastrophe,” challenges us to think differently about disasters. To understand how risk is generated before the disaster happens. To learn from countries, like Holland, which over the centuries mastered their ever-threatening flood catastrophes, through fostering a culture of disaster resilience.

Today we can harness powerful computer technology to help anticipate and reduce disasters. Catastrophe models, originally developed to price and manage insurance portfolios, are being converted into tools to model metrics on human casualties or livelihoods as well as monetary losses. And based on these measurements we can identify where to focus our investments in disaster reduction.

In 2015 the Tokyo City government was the first to announce it aims to halve its earthquake casualties and measure progress by using the results of a catastrophe model. The frontline towns of Italy should likewise have their risks modeled and independently audited, so that we can see if they are making progress in saving future lives before they suffer their next inevitable earthquake.


The Cure for Catastrophe is published by Oneworld (UK) and Basic Books (US)