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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.

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