Swiss Re released a new global earthquake model this September and put it at the fingertips of its Underwriters. This extends Swiss Re's earthquake model range beyond its current Next Generation probabilistic models and offers its Underwriters a lean earthquake model in the markets where earthquake models are not available for the (re)insurance industry.
A full-fledged probabilistic model is cumbersome to develop and requires huge amounts of resources and not a possibility in regions where the insurance penetration is low. Also, good data is not available for faults, building structures, loss data, geography etc. to develop such a model.
Keeping these factors in mind, we developed a simple and lean model framework. Although it is simple and lean, the model still allows to make use of the regional seismicity, soil information and factors which influence the vulnerability of risks and gives a good first guess estimate of the risk in those regions. Another added advantage is the increased efficiency of the Underwriting process as all the costing can now be done in one single platform. This model comes as an extension of the Central Asia and Russia earthquake model that was released last year.
By closing the gap in the model landscape, Swiss re is making its contribution towards closing the protection gap (difference between insured and uninsured losses) in high hazard low insurance penetration regions and help societies become resilient.
Category: Climate/natural disasters: Disaster risk, Earthquakes, Resilience