Willis Report: California May See Less Shaking in Earthquake

November 2, 2008

Ground view of collapsed building and burned area as a result of an earthquake at Beach and Divisadero, Marina District. Photo courtesy of C.E. Meyer, U.S. Geological Survey.

California buildings are less likely to shake, rattle and roll in an earthquake than previously forecasted, according to global insurance broker Willis Group Holdings, which released a report summarizing recent changes in the scientific view of seismic hazard in the United States.

Based on its analysis, Willis said the shaking experienced by a two-story building decreased by 10 percent in many areas of the West for a 475-year earthquake. Also, the shaking experienced by a 10-story building decreased by approximately 35 percent in most of the West for 475-year and 2,475-year quakes. Oregon and southern Washington were exceptions.

The seismic hazard in the Central and Eastern parts of the country for two-story and 10-story buildings decreased by about 10 percent for 475- and 2,475-year quakes.

Willis said reductions in the hazard predictions for those building types were “mainly due to the introduction of the Next Generation Attenuation (NGA) equations for crustal sources and revised attenuation equations for the Cascadia Subduction zone.”

In its report, Willis provides regional maps illustrating the results of two recent academic research papers: the 2008 National Seismic Hazard Maps and the 2007 Uniform California Earthquake Rupture Forecast (UCERF). It focused on the implication those new studies could have on catastrophe risk managers, including a discussion of how the vendor earthquake catastrophe models may change in the United States as a result.

In addition to the NGA equations, USGS incorporated new methods in its 2008 National Seismic Hazard Maps, the report indicates. It said that according to UCERF, which was released in early 2008, there is a 99.7 percent chance there will be a magnitude 6.7 earthquake in California in the next 30 years, and a 46 percent chance of a magnitude 7.5 earthquake in California in the next 30 years. Furthermore, there is a 37 percent chance of a magnitude 7.5 earthquake in Southern California in the next 30 years, which is more than double the chance in Northern California, which has a 15 percent chance in 30 years.

The southern San Andreas Fault has the highest probability, 59 percent, in California of generating at least one magnitude 6.7 earthquake in the next 30 years. Yet new probabilities for the Elsinore and San Jacinto Faults in Southern California are about half of the previous predictions.

In Northern California, the Hayward-Rodgers Creek Fault has the highest probability of at least one magnitude 6.7 quake in the next 30 years, with a 31 percent chance.

“Events of this size can be major loss-causing events for the insurance industry, such as the 1989 Loma Pietra quake that had a magnitude of 6.9 and occurred on the northern San Andreas fault, and the 1994 Northridge quake that had a 6.7 magnitude.

The report further states:

  • “Time-dependent probabilities for a magnitude 6.7 earthquake to occur on the southern San Andreas Fault near Los Angeles are 23 percent higher and on the Hayward-Rodgers Creek near Oakland are 34 percent higher than the time-independent probabilities.
  • The time-dependent probability for a magnitude 6.7 or greater earthquake to occur on the northern San Andreas Fault near San Francisco is about 13 percent lower than the time-independent view.”

In the Pacific Northwest, which lies on the Cascadia Subduction Zone, the report states:

  • “The tail risk in the Pacific Northwest region may change considerably.
  • The shaking experienced by low, mid-rise and high-rise buildings around Salem, Ore., may increase at all return periods.
  • The modifications made by the USGS may cause moderate reductions of 15 percent or more in key return-period losses for high-rise buildings in the Seattle metropolitan area.”

Willis predicted that U.S. earthquake catastrophe models will be recalibrated and therefore the seismic hazard changes presented in the report may be offset or amplified by changes to other modeling components.

“This report lays the ground work for understanding the new scientific view of earthquake risk in the U.S.,” said Julie Serakos, executive vice president of Willis Catastrophe Management Services. The report “serves as the starting point for assisting insurers with making appropriate decisions to manage their earthquake risk going forward.”

The report was added to the curriculum of the Associate in Reinsurance designation program, offered by both the American Institute for Chartered Property Casualty Underwriters and the Insurance Institute of America.

“Risk managers and insurance executives are confronted by an array of obstacles when understanding the current scientific view of seismic hazard,” said Kyle Beatty, vice president of Willis Catastrophe Management Services. “We expect this report, and others to follow, will help them formulate a more comprehensive picture of the key issues at hand.”

To read the full report, visit www.willisresearchnetwork.com.

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