First Chile quake model with tsunami risk launched
Impact Forecasting, the catastrophe modelling arm of Aon Benfield, has launched the first Chile earthquake model that incorporates the risk of tsunami.
On February 27, 2010, a catastrophic earthquake struck near the central coast of Chile – also triggering a tsunami – which at the time made it the second-costliest insured earthquake event in history (second only to the 1994 Northridge, California event). The overall economic damages from the M8.8 Maule event make it the seventh costliest global earthquake since 1950.
In response, Impact Forecasting has developed a probabilistic model for Chile that combines both earthquake and tsunami. The broker said this means insurers can more accurately model their portfolios for high resolution exposure data through detailed structural and occupancy types including mortgage books.
Joseph Smith, CEO of Aon Benfield Chile, said: "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, commented: "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."