Earthquake risk mitigation: preparedness and protection strategies

Earthquakes occur more regularly than is often realised. This year has already witnessed a number of serious earthquakes, but also many other tremors on a smaller scale. By the end of September, more than 50 major earthquakes had been detected around the world.

Sometimes, the effects are huge. For example, economic losses from the Noto earthquake that struck Japan this year are expected to reach $17.6 billion, while Taiwan experienced its strongest earthquake in 25 years.

In Europe, several buildings collapsed in the Turkish city of Solosaray after another earthquake. In South America, Brazil was recently hit by one of the strongest earthquakes it has witnessed in many years.

But even smaller tremors have the potential to cause damage. It is therefore crucial that organizations exposed to earthquake risk address this issue.

What is an earthquake?

An earthquake is the shaking of the Earth due to the release of energy from two of the Earth's tectonic plates sliding over each other.

We know that there are usually about 15 major earthquakes each year around the world, but it is impossible to accurately predict when or where an earthquake will strike.

The largest and most destructive earthquakes tend to occur at the boundaries between tectonic plates, but they can happen almost anywhere.

The effects can be disastrous. Not only can the earthquake itself can cause major destruction, but there is also the possibility of secondary damage as a result of indirect impacts such as tsunamis, landslides and landslides. An earthquake can also cause fires and explosions – if gas or electricity infrastructure is affected. All of these risks increase risks to life and property and can lead to increased business losses.

The magnitude of an earthquake can be measured in two different ways. “Mw” measures the total energy released by an earthquake; The Modified Mercalli Intensity (MMI) measures the intensity of shaking at specific locations, which is affected by the geology and soil types at those locations.

Measuring earthquake risk

Although earthquakes are inherently unpredictable, there are ways that potentially affected organizations can assess the amount of damage they might face if their sites, buildings or equipment are affected by an earthquake.

One way is to study records of past earthquakes. This data can be used to map the location and intensity of past earthquakes in a given area, in order to create a picture of the highest and lowest risk areas.

However, although this can be a useful exercise, it is limited – seismic records typically go back 100 years or so, which means that older and perhaps more powerful earthquakes are not always included in the analysis.

Disaster modeling tools provide more sophisticated insights into earthquake risk. These tools take into account the latest scientific understanding and data to calculate potential financial losses from a range of potential earthquake scenarios.

By leveraging these findings, organizations gain a comprehensive understanding of where the risk of earthquake-related losses is highest. The forms also make it easier to assess whether an organization's insurance coverage is adequate.

In practice, the more information disaster models include – and the better their quality – the more accurate the analysis becomes. Factors the models take into account include local geology, soil type and building vulnerability.

The model therefore requires detailed geolocation data and building information.

It is important to realize that earthquake-related losses can have far-reaching effects. For example, when the 2011 earthquake and subsequent tsunami struck Japan, industries such as the automobile sector saw a significant and prolonged decline in their capacity. This in turn affected their customers, who faced supply chain disruptions as a result.

Some were able to claim compensation under emergency business interruption coverage.

With so much at stake, strategic seismic risk consulting can be invaluable.

Damage caused by two earthquakes of the same magnitude in different locations, or even a single earthquake affecting two areas within the same region, can vary greatly. As a result, organizations need specialized guidance to make informed decisions about risk mitigation and insurance options.

Earthquake risk management

Once organizations understand their risk exposure in more detail, they can begin to make decisions about how to respond in the most cost-effective way.

For example, a North American real estate investment firm with a portfolio of properties in an earthquake-prone area wanted to identify risk mitigation measures that would give it the greatest benefit.

Disaster modeling tools have identified three buildings in its portfolio that account for 60% of the total seismic risk.

These buildings were constructed of unreinforced masonry, making them particularly vulnerable to earthquakes. Although retrofitting with stronger materials would cost $10 million, the process could reduce potential losses by up to $150 million.

A range of insurance products may also be suitable to protect against earthquake risks.

These insurances include both traditional coverage and standard insurance, which pays a set amount to the policyholder if a certain limit is met, rather than according to losses determined through a loss adjustment process.

In the context of earthquakes, this coverage may be triggered if an earthquake with an epicenter within an insured area exceeds a certain magnitude.

This type of insurance may be useful in covering gaps left by property insurance policies – perhaps where certain types of risks are not covered, or where higher excesses or minimums apply.

Parametric cover also provides certainty – policyholders know the claim amount they will receive in specific circumstances – and claims can usually be settled quickly, as no formal loss adjustment process is required.

However, policyholders must accept that the policy will not pay out if the trigger level is not met, even if they suffer losses.

In one recent example, a US public agency with locations over a wide area wanted to ensure it could access immediate cash support in the event of a major earthquake.

I have arranged a parametric solution that provides for compensation to be paid if ground shaking, as measured by peak ground acceleration (in units of percent gravitational acceleration (%g), is above a certain level at specific locations. At 45%g (strong shaking), it will The amount paid is $5 million, rising to $10 million at 60% g (very strong vibration), and to $20 million at 75% g (extreme vibration).

The insurance provides immediate access to support during serious earthquakes with payouts that are independently calculated using open source data and a pre-agreed formula.

By structuring the policy over three years, it was possible to keep premiums low, as the odds of a major earthquake occurring in any of those years are low.

In practice, every case is different. The most appropriate way to manage earthquake risk varies from one organization to another, depending on its individual circumstances.

The starting point is an exposure assessment, which will determine the correct response.

Contact us now to discuss how we can help you through this process of managing earthquake risk more effectively.

How WTW can help

At WTW, we are committed to helping you effectively manage natural disaster risks. Our comprehensive suite of services is designed to protect your assets, reduce downtime and improve your risk management strategies. Here's what we offer:

Risk Assessment and Modeling: We use advanced modeling techniques to assess the potential impact of natural hazards on your assets and operations, providing you with detailed risk profiles and loss estimates. Catastrophe Loss Modeling: We measure your portfolio's losses for various risks, identify the locations causing the most losses, and help you optimize your insurance limits and premiums. In-depth assessments of critical sites: We perform in-depth reviews of local natural hazards and assess the vulnerability of your critical assets through customized risk assessments. This includes site surveys, a Potential Maximum Loss Limit (PML) assessment, and personalized risk optimization recommendations to help you understand your risk profile and manage it effectively. Mitigation and Cost-Benefit Analysis: We identify the assets causing the most losses and downtime, recommend mitigation measures and provide customized cost-benefit analyzes to support risk mitigation decisions. Business Continuity: We analyze your facility's readiness, develop downtime curves, assess common fate and group risks, and provide strategic recommendations to reduce downtime and enhance business continuity.

For expert help discovering smarter ways to manage earthquake risks, please contact us.

Sources 1/ https://Google.com/ 2/ https://www.wtwco.com/en-gb/insights/2024/10/mitigating-earthquake-risk-strategies-for-preparedness-and-protection The mention sources can contact us to remove/changing this article

What Are The Main Benefits Of Comparing Car Insurance Quotes Online

LOS ANGELES, CA / ACCESSWIRE / June 24, 2020, / Compare-autoinsurance.Org has launched a new blog post that presents the main benefits of comparing multiple car insurance quotes. For more info and free online quotes, please visit https://compare-autoinsurance.Org/the-advantages-of-comparing-prices-with-car-insurance-quotes-online/ The modern society has numerous technological advantages. One important advantage is the speed at which information is sent and received. With the help of the internet, the shopping habits of many persons have drastically changed. The car insurance industry hasn't remained untouched by these changes. On the internet, drivers can compare insurance prices and find out which sellers have the best offers. View photos The advantages of comparing online car insurance quotes are the following: Online quotes can be obtained from anywhere and at any time. Unlike physical insurance agencies, websites don't have a specific schedule and they are available at any time. Drivers that have busy working schedules, can compare quotes from anywhere and at any time, even at midnight. Multiple choices. Almost all insurance providers, no matter if they are well-known brands or just local insurers, have an online presence. Online quotes will allow policyholders the chance to discover multiple insurance companies and check their prices. Drivers are no longer required to get quotes from just a few known insurance companies. Also, local and regional insurers can provide lower insurance rates for the same services. Accurate insurance estimates. Online quotes can only be accurate if the customers provide accurate and real info about their car models and driving history. Lying about past driving incidents can make the price estimates to be lower, but when dealing with an insurance company lying to them is useless. Usually, insurance companies will do research about a potential customer before granting him coverage. Online quotes can be sorted easily. Although drivers are recommended to not choose a policy just based on its price, drivers can easily sort quotes by insurance price. Using brokerage websites will allow drivers to get quotes from multiple insurers, thus making the comparison faster and easier. For additional info, money-saving tips, and free car insurance quotes, visit https://compare-autoinsurance.Org/ Compare-autoinsurance.Org is an online provider of life, home, health, and auto insurance quotes. This website is unique because it does not simply stick to one kind of insurance provider, but brings the clients the best deals from many different online insurance carriers. In this way, clients have access to offers from multiple carriers all in one place: this website. On this site, customers have access to quotes for insurance plans from various agencies, such as local or nationwide agencies, brand names insurance companies, etc. "Online quotes can easily help drivers obtain better car insurance deals. All they have to do is to complete an online form with accurate and real info, then compare prices", said Russell Rabichev, Marketing Director of Internet Marketing Company. CONTACT: Company Name: Internet Marketing CompanyPerson for contact Name: Gurgu CPhone Number: (818) 359-3898Email: [email protected]: https://compare-autoinsurance.Org/ SOURCE: Compare-autoinsurance.Org View source version on accesswire.Com:https://www.Accesswire.Com/595055/What-Are-The-Main-Benefits-Of-Comparing-Car-Insurance-Quotes-Online View photos