Advanced Modeling Methodology to Assess Earthquake
The 2010–2011 Canterbury Earthquake Sequence was the world's second-largest insured loss from earthquake in history, and the 2016 Kaikōura Earthquake was one of the most complex events ever recorded. The New Zealand Earthquake model uses learnings and data from these events, in addition to the latest science and modeling methodologies, are incorporated in the model, which is the first to include liquefaction, landslide, fire following earthquake, and tsunami.
Outperform With High Definition
The HD framework brings many benefits. Calculating losses at the location-coverage level reflects how losses occur in reality. The HD financial model enables more robust loss calculations with the flexibility to model an array of policies, including New Zealand-specific coverage such as the EQC. The New Zealand Earthquake model also enables you to access over a million realizations of earthquake losses to acquire a complete view of risk, including from extreme tail-risk events.
Enables Risk-Based Pricing
The high-resolution methodology used in New Zealand earthquake modeling captures local variations in soils, liquefaction, and landslide, and includes the ability to model risks built on slopes. This helps users differentiate between risks and manage the local market shift to residential sum insured and the introduction of risk-based pricing.
Understand Your Tail Risk
The Reserve Bank of New Zealand has a 1,000-year solvency requirement. This is one of the longest regulatory reporting return periods in the world. The New Zealand Earthquake HD model includes a large range of events, including very rare tail events, complex multi-fault earthquake ruptures and an in-built probabilistic tsunami model. To help quantify your tail risk.
New Zealand Earthquake HD Model
The most sophisticated and up-to-date view of earthquake risk in New Zealand.
Advanced Liquefaction Model
The Canterbury Earthquake Sequence produced some of the most extensive liquefaction ever seen, with Christchurch suffering widespread damage. Using data from the city, the liquefaction model has been redesigned and calibrated to enable you to understand the risk from this high-resolution peril.
Extensively Validated Source Model
The model includes the latest science behind the most recent National Seismic Hazard Map and seismological studies, as well as RMS thought leadership regarding events that “jump” from one fault segment to another in the combined rupture of several mapped faults, as seen in the Kaikōura Earthquake – one of the most complex earthquakes ever recorded.
Calibrated With Billions of Dollars of Claims
The vulnerability model represents current construction practices within up-to-date design code regions. The model combines the latest engineering research with high-resolution claims data to reflect the damageability of the building stock. Vulnerability curves for buildings with hollow-core floors reflect the performance of mid-rise buildings in Wellington’s Central Business District (CBD) in the Kaikōura event – many buildings were demolished as repairs were not economically feasible.
Developed With the Local Market
The New Zealand earthquake model was built in collaboration with local experts, scientific agencies, and the (re)insurance industry. The model utilized a wealth of claims data from local events to inform aspects of modeling, from new data for component development and methodological advances to calibration and validation. RMS continues to participate in local market forums, through involvement in GNS Science’s Technical Advisory Group for the next National Seismic Hazard Model update.
Empower your expert team with the latest New Zealand Earthquake HD Model data and insights, including delivery of data directly to your underwriter's laptop or tablet device through an API to underwriting systems or access to the complete model.
Understanding the Aftershock Cloud: 10 Years on Since the Christchurch Earthquakes
Since the year 2000, only one city located in an advanced market economy has been severely impacted by an earthquake. This was the Mw6.2 event that occurred on February 22, 2011, in Christchurch, the capital of South Island, New Zealand, with an epicenter at Port Hills on the southern edge of the city. This event was part of the 2010–11 Canterbury Earthquake Sequence, which started with the Mw7.1 Darfield Earthquake on September 4, 2010. The Christchurch…
Preparing for a 1-in-1,000 Year Loss: Insurance Resilience 10 Years After the Christchurch Earthquake
Not many countries have experienced a catastrophe that directly hit one of their largest cities, but for New Zealand, on February 22, 2011, an M6.2 earthquake struck less than 6 miles (10 kilometers) from the Christchurch central business district. The event generated significant ground motions and unprecedented and widespread liquefaction. Furthermore, it was the most destructive event of the Canterbury Earthquake Sequence (CES), a series of earthquakes across…
RMS Launches New Products and Models on RMS Risk Intelligence, the Unified Cloud Platform for Global Risk
NEWARK, CA – May 4, 2020 – As the world is changing in profound ways, so is risk. Climate change, pandemic events, and cyberattacks are threats we all now have to consider in new and innovative ways. With better understanding of risks, better decisions can be made, enabling better risk management end-to-end. Today, at the opening of its annual Exceedance conference, RMS®, the world’s leading catastrophe risk solutions company, announced significant new…
New Zealand Earthquake: How the Last Decade Has Changed Everything
Go back to this time 10 years ago and earthquake risk in New Zealand was a relatively low priority for the global (re)insurance industry; a decade later, and this perspective has certainly changed. Insured losses of around NZ$40 billion (US$24.1 billion) came from the 2010-2011 Canterbury Earthquake Sequence (CES) and the 2016 Kaikoura earthquake; the former is the world’s second largest earthquake insured loss. These events had a considerable impact across…
Insurance Australia Group (IAG) Selects RMS High Definition New Zealand Earthquake Model to Strengthen its View of Risk
Australia - October 15, 2018 RMS, the global risk modeling and analytics firm, today announces that Insurance Australia Group (IAG), a leading multinational insurer, has licensed the RMS High Definition New Zealand Earthquake Model. The RMS High Definition (HD) New Zealand Earthquake model is the world’s first earthquake model to benefit from the RMS HD model simulation-based framework which models tens of thousands of realizations of future…
Perth, Wellington, Bali make 1-in-100 disaster list
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…
De-risking the City
I am in Wellington, New Zealand, looking out from a rainy hotel window high over the city, admiring the older wooden houses on the forested slopes. Below there are four to eight story office and retail buildings, a number of which are shrouded in scaffolding, still repairing damage from the 2016 Kaikoura earthquake. The earthquake epicenter was some distance from the city, but the pattern of fault ruptures propelled long period ground shaking into the heart of…
How Will Insurers Be Affected by Changes in New Zealand EQC Coverage Layers?
Around 98 percent of residential homes in New Zealand have earthquake insurance. This remarkable achievement is due to a unique partnership between the New Zealand government Earthquake Commission (EQC) working together with the insurance industry. From its origins in 1945 as the Earthquake and War Damage Commission – renamed as the EQC in 1993, the Commission is supported by an Act of Parliament which sees the Crown as the insurer of first resort for…
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