Updated earthquake model for Canada released by AIR Worldwide

AIR Worldwide’s Earthquake Model for Canada – which the risk modelling firm calls a significant tool for compliance with Guideline B-9 – has been updated to provide insurers and other industry stakeholders with an enhanced means of assessing potential losses from ground shaking, fire following earthquake, tsunami, liquefaction and landslide.

“The model reflects an up-to-date view of seismicity based on the latest hazard information from the Geological Survey of Canada (GSC) and collaboration with leading academics,” Dr. Jayanta Guin, executive vice president, research and modelling for AIR Worldwide, says in a statement from AIR, a member of the Verisk Insurance Solutions group at Verisk Analytics.

“The release is the first in the industry to (also) include fully probabilistic landslide and tsunami models for Canada,” Guin says.

Features of the updated model include the following:

• the hazard component offers a comprehensively updated seismicity model using the latest historical earthquake catalogue from the GSC;
• paleoseismic and active fault data in western Canada has been used and a comprehensive kinematic model using GPS and other geodetic data constructed to estimate the accumulation of seismic energy in the Cascadia Subduction Zone and in the shallow crust of British Columbia;
• detailed geotechnical and microzonation studies of several metropolitan areas, including Ottawa, Montreal, Victoria and Vancouver, are used to account more accurately for the impact of surface soils on ground shaking; and
• damage functions for industrial facilities and infrastructure have been added.

“This physically based model is especially useful for estimating the recurrence rates for rare, very large magnitude earthquakes and source parameters for earthquakes capable of producing tsunamis,” AIR reports.

The statement notes that Insurance Bureau of Canada previously selected AIR to conduct what is says is the most comprehensive study of seismic risk in Canada ever undertaken. The study cautioned that Canada was not prepared for a major earthquake and that both economic and insured costs would be significant.

AIR modelled scenarios involving a 9.0-magnitude earthquake off the west coast of Vancouver Island and a 7.1-magnitude quake about 100 km northeast of Quebec City and found that for the western scenario, economic losses would be about $74.7 billion and insured losses approximately $20.4 billion, while for the eastern scenario, those losses would be about $60.6 billion and approximately $12.2 billion, respectively.

“AIR has deep knowledge in catastrophe risk management, including the impact of earthquake and tsunami on properties and infrastructure, and has been a great collaborator on this project,” Gregor Robinson, IBC’s senior vice president of policy and chief economist, says in the statement.

“It is a direct result of this collaboration that our newly updated Canada earthquake model provides the most complete view of seismic risk to residential, commercial and industrial properties and infrastructure,” Guin adds.

In rebuilding the model, AIR also took the opportunity to ensure consistency between the United States and Canada earthquake models, the company reports, adding that a unified stochastic catalog for both countries was created to enable catastrophe model users to quantify the risk to policies and portfolios that span the border.

The model is currently available in Version 2.0 of the Touchstone and Version 16 of the CATRADER catastrophe risk management systems.