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Insurance Solutions

Formerly Moody’s RMS

Jochen Wössner, lead modeler, RMS Model Development

Delphine Fitzenz, principal modeler, RMS Model Development

Earthquake forecasting is in the spotlight again as an unresolved challenge for earth scientists, with the world tragically reminded of this after the deadly impacts of recent earthquakes that hit Ecuador and Italy. Questions constantly arise.  For instance, when and where will the next strong shaking occur and what can we do to be better prepared for the sequence of earthquakes that would follow the main shock? What actions and procedures need to be in place to mitigate the societal and economic consequences of future earthquakes?

The United States Geological Survey (USGS) started a series of workshops on “Potential Uses of Operational Earthquake Forecasting” (OEF) to understand what type of earthquake forecasting would provide the best information for a range of stakeholders and use cases.  This included delivering information relevant for the public, official earthquake advisory councils, emergency management, post-earthquake building inspection, zoning and building codes, oil and gas regulation, the insurance industry, and capital markets. With the strong ties that RMS has with the USGS, we were invited to the still ongoing workshop series and contributed to the outline of potential products the USGS may provide in future.  These can act as the basis for new solutions for the market, as we outline below.

Operational Earthquake Forecasting: What Do Seismologists Propose?

The aim of Operational Earthquake Forecasting (OEF) is to disseminate authoritative information about time-dependent earthquake probabilities on short timescales ranging from hours to months. Considering the large uncertainty in the model forecasts, there is considerable debate in the earth scientist community whether this effort is appropriate at all – especially during an earthquake sequence when the pressure to disseminate information becomes intense.

Our current RMS models provide average annual earthquake probabilities for most regions around the world, although we know that the latter constantly fluctuate due to earthquake clustering on all timescales.  OEF applications can provide daily to multi-year forecasts based on existing clustering models that update earthquake probabilities on a regular schedule or whenever an event occurs.

How Much Can We Trust Short-Term Earthquake Forecasting?

A vast amount of research focused on providing short-term earthquake forecasts (for a month or less) has been triggered by the Collaboratory Study for Earthquake Predictability (CSEP), spearheaded by scientists of the Southern California Earthquake Center (SCEC). The challenge is that the forecasted probabilities are very small.  They may increase by factors of 1000, but remain very small even when they jump from one-in-a-million to one-in-a hundred thousand. Only in the case of an aftershock sequence would this climb to above a 10 percent chance for a short period, yet again with considerable uncertainty between different models. While this is a challenging task, the developments over the last 20 years have allowed for increased confidence as these models are already implemented in some countries, such as New Zealand and Italy.

How Can We Use OEF and What Do We Require?

RMS is dedicated to understanding new potential solutions that can fill market needs. OEF has the potential to generate new solutions if paired with reliable, authoritative, consistent, timely, and transparent feeds of information. This potential can translate into innovations in understanding and managing earthquake risk in the near future.

About Jochen Wössner:

Lead Modeler, RMS Model Development

Jochen Wössner works on earthquake source and deformation modeling with a focus on Asia earthquake models. He joined RMS in 2014 from ETH Zurich following the release of the European Seismic Hazard Model as part of the European Commission SHARE project which he led as project manager and senior scientist. Within the Collaboratory for the Study of Earthquake Predictability (CSEP), he has developed and contributed to real-time forecasting experiments, especially for Italy.

About Delphine Fitzenz:

Principal Modeler, RMS Model Development

Delphine Fitzenz works on earthquake source modeling for risk products, with a particular emphasis on spatio-temporal patterns of large earthquakes.  Delphine joined RMS in 2012 after over ten years in academia, and works to bring the risk and the earthquake science communities closer together through articles and by organizing special sessions at conferences.

These include the Annual Meeting of the Seismological Society of America (2015 and 2016), an invited talk at the Ninth International Workshop on Statistical Seismology in Potsdam, Germany in 2015, on “How Much Spatio-Temporal Clustering Should One Build Into a Risk Model?” and an invitation to “Workshop One: Potential Uses of Operational Earthquake Forecasting (OEF) System” in California.

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