The Sensitivity of Earthquake Risk to Geodetic Data: A Case Study in Chile

Date: 4/25/2019

Time: 06:00 PM

Room: Grand Ballroom

Traditional probabilistic seismic hazard assessment (PSHA) studies typically primarily rely on seismological and geological data sources and only in some cases also on geodetic data sources. An example of the incorporation of geodetic data is the 2015 Uniform California Earthquake Rupture Forecast, Version 3, or UCERF3. Incorporating geodetic data into a PSHA study is especially important when the deformation signal in these observations is different from that in the earthquake or fault slip data.

Catastrophe modeling companies like Risk Management Solutions (RMS) use the underlying data of hazard maps to develop risk metrics for insured risk management. Commonly used risk metrics are average annual loss (AAL) and exceedance probability (EP) curves. AAL is the product of location loss and annual rate for all events, and is used to set annual premiums, while keeping the long-term risk in mind. The EP curve is also derived from the full set of events that impact an exposure. It plots the probability of exceeding a particular loss level and provides quantification to solvency assessment and portfolio management. Regulatory agencies and sound financial management require that insurance companies have the financial capacity to pay out at a certain return period, oftentimes the portfolio’s 250 or 500 year return period loss.

Earthquake hazard in Chile is high. Insurance plays a major role in its earthquake resilience, in insurance terms: earthquake insurance penetration is high. If we look at earthquake risk in terms of earthquake source types, we find that the main risk contributor to Chilean AAL as well as to the country-wide EP curve is the subduction zone. Secondary contributors are crustal faults and the background seismicity. Here we discuss the quantitative impact on the Chilean hazard and risk profile of incorporating geodetic data that monitor the subduction zone.

Presenting Author: Marleen Nyst

Authors