RMS Ups UK Quake Loss Estimates: $30 to $60 Million

Risk Management Solutions has given updated estimates of the likely insured losses caused by the earthquake that struck Market Rasen in Lincolnshire in Northeast England on Thursday (See IJ web site – https://www.insurancejournal.com/news/international/2008/02/28/87725.htm).

RMS said the quake “is likely to cause insured losses of between £15 million and £30 million [$29.76 million to $59.5 million) according to initial estimates.”

RMS said that most of the damage “was sustained some 18 miles away in Gainsborough, where residential and commercial properties were affected. The concentration of damage in the southern area of the town is likely to be a result of poor soil conditions, which are known to amplify the impact of earthquakes, and weaknesses in the buildings.”

Dr. Andrew Sorby, RMS’ model manager for Europe earthquake, compared the relatively heavy damages in England to those that would probably occur from a quake of the same magnitude in California. Had the same event happened there, “where earthquake risk is high and properties are built to withstand ground-shaking, the damage would have been minimal,” he indicated.

Sorby also noted that many UK properties are made of masonry, which makes them more prone to severe cracking during earthquakes compared to wood-framed buildings. He cited the damages caused by an earthquake the struck Folkestone in April last year, where losses were between £20 million and £30 million, “mostly concentrated in a small residential area consisting of mainly Victorian properties, which tend to be more prone to damage.”

“Earthquake insurance is included as standard in most homeowner and commercial business policies, together with wind and flood risk. “Since the summer floods, which affected many of the same areas impacted by the earthquake, more people are likely to have taken out insurance to protect their properties, so most of the damage from this earthquake should be covered,” Sorby added.

Source: RMS – www.rms.com