Risk Management Solutions has launched an extensive new model for earthquake risk in Europe, which it believes is the “most comprehensive model of its type.” It covers Austria, Belgium, Germany, Italy and Switzerland, as well as Liechtenstein and Monaco.
“The RMS® Europe Earthquake Model uses the latest scientific processes to help insurers and reinsurers underwrite their policies and gain a more complete view of their portfolio risk,” said the announcement. It “captures the correlation of seismic hazard across country boundaries, providing a consistent framework for risk assessment in Europe and allowing users to make direct comparisons between countries and review risk on a region-wide basis.”
RMS noted that while Italy has a “relatively high” earthquake risk, there are also a “number of moderate earthquakes” that have caused damage across Austria, Belgium, Germany, and Switzerland.
As an example RMS pointed out that Basel, which is in northwest Switzerland, near the French and German borders, had experienced a quake in 1356, estimated to have been 6 to 6.9. RMS said that according to some scenarios, “if a similar earthquake were to occur today economic losses in Switzerland and Germany combined could exceed €50 billion [$67 billion].”
The bulletin added that “the uncertainty around recurrence of such events, together with the potential levels of loss, has led to increasing concern over earthquake risk in Europe.” Even moderate events “could cause severe damage and disruption in Europe, due to its high-value exposure.”
Joerg Mueller, vice president of RMS Continental Europe explained that in order to effectively manage portfolio risk, “insurers and reinsurers need to be able to assess the impact of these infrequent but potentially devastating events.”
The RMS® Europe Earthquake Model is part of a suite of European peril models including wind, flood and hail. “Expanding the Europe Earthquake Model is a significant step towards providing a complete modeling solution in Europe,” Mueller added.
The model was launched alongside a set of new and updated catastrophe models and software with version 7.0 of the market-leading RiskLink and RiskBrowser modeling systems on 20 June. Version 7.0 also includes new earthquake models for China and India and an upgraded model for New Zealand earthquake.
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