Impact Forecasting, the catastrophe model development center of excellence at Aon Benfield, announced the launch of a Chile earthquake model that also incorporates tsunami risks, the first such model to do so.
The launch is timely in view of the catastrophic earthquake that struck near the central coast of Chile On February 27, 2010, which also triggering a tsunami. The event made it the second-costliest insured earthquake event in history (second only to the 1994 Northridge, California quake). The overall economic damages from the M8.8 “Maule event” make it the seventh costliest global earthquake since 1950.
Impact Forecasting said it “has developed a probabilistic model for Chile that combines both earthquake and tsunami. Latest scientific research on the seismic risk in Chile from Aon Benfield Research partners has shaped the results of the tool which have been validated against data from the 2010 Maule event.
“This now means insurers can more accurately model their portfolios for high resolution exposure data through detailed structural and occupancy types including mortgage books. Scenario analyses can also be conducted for the following historical events: 1960 M9.3 Valdivia, 1985 M8.0 Valparaiso, 2005 M7.8 Tarapaca, 2007 M7.7 Tocopilla and 2010 M8.8 Maule – plus the 1 April 2014 M8.2 Iquique earthquake.”
In addition the bulletin pointed out that as with all Impact Forecasting models, “insurers have the ability to customize the Chile model – for example based on their own claims data – and have access to transparent and detailed model documentation. The model runs on the ELEMENTS loss calculation platform that provides a set of tools to visualize, map, quantify and manage the exposure, hazard, vulnerability and uncertainty in the model.”
Aon Benfield Chile CEO Joseph Smith commented: “This is an exciting time for the region as it’s the first model of its kind, so Impact Forecasting has really pioneered into new territory. The unrivalled model provides an alternative and more realistic view of the earthquake risk in Chile which is a key differentiator for Aon Benfield as we continue to heavily invest in analytics to support insurers and reinsurers in the Latin America region.”
Goran Trendafiloski, head of earthquake development at Impact Forecasting, explained: “We are committed to reducing the number of non-modelled perils and tsunami was an important hazard for us to tackle due to the devastating impact it had on Chile. Crucially, we are now able to adapt this local science and new methodology to other countries, enabling an improved understanding of this peril on a global basis. The recent Iquique earthquake has also demonstrated our dedication to provide the best service to our clients through our real time response capability.”
Source: Aon Benfield/Impact Forecasting
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