Category Archives: Earthquake

Did Ridgecrest Increase the Chances of a Large Seismic Event?

Interest in the 160-mile-long Garlock Fault, the second-largest fault in California, has been piqued recently after a Los Angeles Times article about deformation on the Garlock Fault due to the Ridgecrest sequence of events in July 2019. Since the publication of this article, RMS has received information requests focused around two main points.

First, does RMS believe that Ridgecrest impacted the Garlock Fault (and possibly others), and has therefore increased the probability of a rupture there? Second, does RMS support the assumption from the U.S. Geological Survey (USGS) that the most likely scenario is that the Ridgecrest quakes probably won’t trigger a larger earthquake, but have raised the chances of an earthquake of magnitude 7.5 or more on the nearby Garlock, Owens Valley, Blackwater and Panamint Valley faults over the next year. And how would RMS recommend that clients model and capture this increased risk?

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MyShake: New App Unveiled for California Earthquake Early Warning

As my colleague Mohsen Rahnama reminded us in his recent blog, the last destructive earthquake to strike Northern California was on October 17, 1989. Loma Prieta was a magnitude 6.9 earthquake which resulted in 63 deaths and about four thousand injuries. The epicenter was about ten miles northeast of Santa Cruz, and seismic waves took about 30 seconds to reach San Francisco. But there was no way of communicating any earthquake early warning to residents of the Marina district of San Francisco, which suffered some of the worst damage from shaking and fire outbreak.

On October 17, 2019, the thirtieth anniversary of this earthquake, the California Governor’s Office of Emergency Services unveiled a smartphone app from the University of California, Berkeley Seismological Lab that will give all Californians the opportunity to receive earthquake early warnings.

Governor Gavin Newsom, who happened to be in the Marina district at the time of the 1989 earthquake, has urged people to download the MyShake app. This app (myshake.berkeley.edu) is available on the Apple App Store and Google Play, and relies on the ShakeAlert earthquake early warning system, developed by the U.S. Geological Survey (USGS).

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Loma Prieta and 30 Years of Bay Area Growth

Thirty years ago, the Mw6.9 Loma Prieta Earthquake struck the San Francisco Bay Area. When looking back at disasters, it is always particularly relevant to understand the moment in time impacted. The Loma Prieta Earthquake struck on Tuesday, October 17, 1989 at 5:04 p.m. local time, but it was no ordinary Tuesday afternoon. Game Three of the Major League Baseball 1989 World Series was to start at 5:35 p.m. between the two Bay Area teams: the Oakland Athletics and the San Francisco Giants.

Typically, 5:04 p.m. would represent the height of rush hour in the Bay Area, but because of the game a significant component of the workforce had left work early or had stayed late to watch it. While 63 lives were lost, this loss level was much lower than it might have been given the level of damage that impacted highways across the region including the failures of the Nimitz Freeway and the San Francisco–Oakland Bay Bridge.

I was at Stanford University in the Terman Engineering Building studying when the earthquake struck. The Stanford campus made up of numerous historical buildings saw substantial damage. In all, more than 200 structures were impacted. The restoration of the damage took more than a decade to fix and cost Stanford more than US$160 million. Classes were canceled for more than a week. Students were locked out of damaged buildings which meant they could not access their research samples, data and equipment. Adding to the stress were the innumerable aftershocks. For those of us studying engineering, it really brought home the importance of our work.

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The Year of the Kitten

Almost three months ago we passed a remarkable record in catastrophe loss.

And yet no one seems to want to celebrate it.

No banner headlines in the newspapers. No speeches at the Monte Carlo Reinsurance Rendezvous.

The first half of 2019 generated the lowest catastrophe insurance loss for more than a decade. The estimates come in at: US$15 billion (Munich Re), US$19 billion (Sigma), or US$20 billion (Aon). In straight dollar terms, independent of any adjustment for inflation or exposure, this is lower than any year since 2006.

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EXPOSURE Magazine: Looking Ahead to the Next Ten Years

The year 2020 is just months away, and in the latest edition of EXPOSURE — the RMS magazine for risk management professionals, we consider some of the changes that the (re)insurance industry will have undergone in ten years’ time. Mohsen Rahnama, Cihan Biyikoglu and Moe Khosravy from RMS tackle the issues, examining the evolution of risk management, the drivers of technological change, and how all roads lead to a common, collaborative industry platform.

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Should New Zealand Be Content with the New EQC Coverages and Caps?

The revised earthquake coverages and caps proposed by the New Zealand Earthquake Commission (EQC) came into law as planned on July 1, 2019. As noted in an RMS blog back in February, these well signaled changes – to increase the building coverage from NZ$100,000 to NZ$150,000 and remove the NZ$20,000 contents cover, only had a small effect on the gross average annual loss for both EQC and the private market. Swapping the first layer of contents exposure for a larger, higher layer of building exposure produced a result that was close to neutral.

Examining the Exceedance Probability (EP) curve (see figure 1 below), the changes are small across all return periods. There are small increases in loss for the private market at short return periods (which produce the small increase in average annual loss reported earlier) but very little change at long return periods.

Critically, the modeled gross 1000-year loss to the private market is essentially unchanged, meaning there are no implications with regards to the Reserve Bank of New Zealand (RBNZ) solvency requirements. Further, these EQC coverage changes are not expected to affect the peril balance driving trans-Tasman solvency considerations where both the RBNZ and Australian Prudential Regulation Authority (APRA) standards must be met.

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The Mw7.1 – 2019 Ridgecrest (California) Earthquake Sequence

The recent events that shook a relatively remote part of the Mojave Desert region of Eastern California provide an acute reminder of the major risk posed by earthquakes in the state. It has been a while now since California experienced a large earthquake, and the main event in this sequence – with a magnitude of Mw7.1, was the most powerful earthquake to occur in the state in twenty years.

Since then, the field of seismology as well as earth scientific measuring capabilities have undergone quite substantial improvements and innovations. Immediately after the start of the sequence, several coordinated efforts from academic, government and engineering organizations resulted in focused field surveys and the installation of additional, more densely spaced instrumentation to monitor seismicity and surface deformation, in and around the epicentral area.

So far, extraordinary amounts of high-quality data have been collected that will undoubtedly provide new insights and understanding of earthquakes in general and earthquake hazard and risk in (Southern) California, in particular. Work on these new data sets has only just started, but what have we learned so far? Here is a summary of observations and interpretations based on various (preliminary) field surveys, reports and briefings.

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Spread the Word on Building Resilience for Vulnerable Communities

It was off to another prestigious London venue last week for the RMS team, to attend the Insurance Post British Insurance Awards at the Royal Albert Hall. In addition to fulfilling lifelong dreams to see Rick Astley perform live, the RMS team was also competing for the Risk and Resilience Award, alongside four other very worthy contenders. And, first presentation of the night, I was delighted to represent RMS to collect this important award.

This award recognized our longstanding charity partner Build Change, who we have worked together with for six years. Both organizations share a mission: to reduce lives lost from disasters by strengthening the built environment in economically deprived areas.

By combining RMS’ risk modeling expertise and institutional support with Build Change’s technical knowledge and grassroots approach, we’ve been able to demonstrate that retrofitting buildings, from homes to schools, in vulnerable neighborhoods across the globe can significantly reduce economic loss and save lives. And one of our many collaborations was an initiative to greatly improve the safety of seismically-vulnerable communities in Colombia.

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The Disappearing Tokyo Risk Audit

Without the ability to measure, how do we know if we are making progress?

In December 2012, in preparation for the renewal of the UN Millennium Development Goals, I wrote a report for the U.K. Government Department for International Development (DFID) advocating that catastrophe models should be used to measure progress in disaster risk reduction. I suggested goals could be set to target a 50 percent reduction in expected casualties and a 20 percent reduction in normalized economic losses, over the period of a decade, based on the output of a catastrophe model.

Two years later, the seven targets agreed at the UN meeting on Disaster Risk Reduction, held on March 14–18, 2015, in Sendai, Japan – were a disappointment. The first two targets for “Disaster Mortality” and “Affected People” would simply compare data from 2020-2030 with 2005-2015. The third target was to “reduce direct disaster economic loss in relation to global GDP by 2030”. Yet we know, especially for casualties – even at a global level, a decade is not enough to define a stable mean. For cities and countries, comparing two decades of data will generate spurious conclusions.

And so, it was a relief to see that only two weeks later, the Japanese and Tokyo city governments announced they had set themselves the challenge of halving earthquake casualties over a decade, measured by modeling a hypothetical event based on the M7 1855 Edo earthquake under Tokyo. I referenced this announcement and quoted it widely in presentations, to highlight that risk modeling had been embraced by the country with the most advanced policies for disaster risk reduction.

Over the last two years, I started searching for some update on this initiative. What kind of progress in risk reduction was being achieved, whether the targets for Tokyo would be met? And I found my original links had all stopped connecting. Perhaps in my enthusiasm I had dreamt it?

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EXPOSURE Magazine: Exploring the World of Risk Management

With the start of the U.S. wildfire season on the horizon, in the latest edition of EXPOSURE – the RMS magazine for risk management professionals, wildfire is our lead story, as we examine whether it now needs to be considered a peak peril. The 2017 and 2018 California wildfires have forced one of the biggest re-evaluations of a natural peril since Hurricane Andrew in 1992, as the industry begins to comprehend the potential loss severities.

The article argues that there are similarities with U.S. wildfire as there was with North Atlantic hurricane in 1992 – catastrophe models were relatively new and had not gained market-wide adoption, and many organizations were not systematically monitoring and limiting large accumulation exposure in high-risk areas. Find out why a rethink is required about how the risk management industry currently analyzes the exposure and the tools it uses.

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