The recent earthquake and subsequent tsunami off the coast of Japan represent an opportunity for risk modelling agencies and reinsurers to push for changes that could prevent such devastating damage and losses from such events in the future.
“An earthquake of this magnitude has not occurred since modern instruments to measure the detailed ground motions have been available. Every event represents a learning curve for the industry but something of this size, especially so. All the data we had before was based on smaller events—now we can see how accurate our extrapolations were for events of this size and, where necessary, refine our models accordingly.”
That is how Robert Muir-Wood, chief research officer at Risk Management Solutions (RMS), describes his view on the importance the risk modelling and reinsurance industry must attribute to the recent catastrophe in Japan. “We will collect some very detailed data from this terrible event and there are a lot of areas we can learn from,” he says.
The March 11 earthquake, which measured 8.9 on the Richter scale, was the biggest to hit the country since modern seismology was introduced. It ranks as the fourth or fifth-biggest quake to be recorded anywhere since 1900, depending on who you ask. But it also surprised many for its location was not close to Tokyo—where the most dangerous fault zone is generally acknowledged to be—but farther north, in the southern part of the Japan Trench, formed by the collision of the Pacific and Okhotsk plates.
Japan, RMS, Munich Re, EQECAT, Towers Watson, AIR