June 9, 2017 by Canadian Underwriter
RMS’s latest North America earthquake models – covering the United States, Canada, and Mexico – are designed to help company clients manage their risk accumulations with more confidence and help with underwriting a better book of business.
Version 17.0 benefits from an immense volume of new scientific research and data meant to provide a truly granular view of seismic risk, the global risk modelling and analytics firm notes in a statement Thursday.
The new models “the highest quality implementation of earthquake science and data available in the (re)insurance industry,” RMS maintains.
The reference point for the updated U.S. earthquake model is the U.S. Geological Survey (USGS) 2014 national seismic hazard model, preserving fidelity to the USGS model while maintaining practical run-times without taking short-cuts.
“A key insight of the updated RMS model is that it captures what is now understood to be the potential for larger and more correlated seismic events in California, as well as new views of risk across all the regions of the U.S.,” the statement notes, with new functionality allowing clients to consider quake risks linked to oil and gas extraction.
The Canada model, for its part, incorporates an updated historical earthquake catalogue, spanning almost 400 years, and other hazard data from the Geological Survey of Canada. The model includes all provinces and territories.
“It also features a new Vancouver Basin Model to better capture the complex shaking amplification caused by the deep layers of soft, sedimentary rock in the area, in addition to a new suite of tsunami accumulation footprints for the west coast of Canada,” RMS reports.
Last, the Mexico model includes an updated, time-dependent view of the Mexico Subduction Zone that considers recent earthquakes and their impact on the likelihood of future events. There is also increased definition of regional vulnerability in design and building practices, with vulnerability regions at 100-meter resolution.
Consistent framework for all models offers “firms greater ability to differentiate risk across the U.S., Canada and Mexico, using the new high resolution approach to characterizing local soil conditions and their impact on ground motion amplification,” the statement notes.
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An improved liquefaction model for the three jurisdictions – leveraging data from billions in claims made following the Canterbury Earthquake Sequences in New Zealand – is also included.
“We overcame significant technical and computational challenges to deliver (an updated model) which is suitable for not only portfolio management and risk transfer, but individual, more granular risk selection,” Mohsen Rahnama, RMS’s chief risk modelling officer, says in the company statement.
“The model affords clients the rigorous insights needed to use capacity more efficiently, and successfully compete in today’s market environment,” Rahnama adds.