RMS Launches Eastern U.S. and Canada Earthquake Model

June 8, 2006

Risk Management Solutions (RMS), Newark, Calif., has updated its U.S. and Canada Earthquake models.

“Earthquakes east of the Rockies are less common than in the tectonically active West, but can be more severe due to the slower attenuation of ground motion and less seismically-resistant building stock,” said Don Windeler, earthquake practice lead at RMS. “Our revised U.S. and Canada Earthquake models provide users with powerful tools for both underwriting and portfolio management in these regions.”

RMS updated the source modeling for these rare events by using the current national seismic hazard maps from the U.S. Geological Survey and the Geological Survey of Canada, as well as new research into the behavior of key areas driving the risk to insured portfolios. The treatment of the largest earthquakes in the New Madrid seismic zone, for example, includes stochastic events incorporating variability in geometry, ground motion, magnitude estimates, and single or multi-event occurrence.

Another key advancement involves the extension of RMS’ spectral response-based vulnerability modeling from the western earthquake regions to the eastern regions, providing a consistent analytical framework for risk quantification across the U.S. and Canada. That approach captures the variations in spectral frequency content with magnitude, distance, and site conditions, and analyzes the ways that they interact with buildings of different heights and materials. The ground motions from earthquakes in the eastern U.S. and eastern Canada have greater high-frequency content than events in the west, an important characteristic in capturing the risk profile for low-rise structures in this region, RMS said.

Using the new U.S. Earthquake Model and insured exposure as of 2006, RMS estimates that the states east of the Rockies comprise 20 percent of the average annual loss from earthquakes in the United States. A majority of that 20 percent comes from the five states surrounding the New Madrid seismic zone (Missouri, Illinois, Tennessee, Kentucky, and Arkansas). RMS estimates that a magnitude 7.7 New Madrid earthquake, similar to the one that occurred in December of 1811, would result in more than $60 billion in insured losses today.

For more information, visit www.rms.com.

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