Diego Sudamerica

7/25/2019 Diego Sudamerica

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THE NEW AIR EARTHQUAKEMODELS FOR SOUTH AMERICAChile | Colombia | Ecuador | Peru | Venezuela


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Earthquakes of M4.0 and greater in the South America region. (Source: AIR)


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SEISM

ICIT

Y

Located along the so-called Ring of Fire,the western coast of South America is

one of the most seismically active regions

of the world. The largest earthquake

ever recorded took place herean M9.5

event that struck Valdivia, Chile, in 1960.

More recently, the 1998 M7.2 Bahia de

Caraquez-Canoa earthquake in Ecuador,

the 2004 M8.2 Pizarro earthquake in

Colombia, the 2007 M8.0 Pisco earthquake

in Peru, the 2010 M8.8 Maule and the

2014 M8.2 Iquique earthquakes in Chile

have all caused extensive damage. The AIR

models provide the most up-to-date viewof seismicity based on the latest historical

catalogs and active fault databases from

several global, regional, and local sources.


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Maximum inundation height (in meters) caused by the 2010 Maule tsunami event. (Source: AIR)


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TSUN

AMI

The 2010 M8.8 Maule, Chile, earthquake

was a reminder of the risk of tsunamis

to those living along the Pacific coast of

South America. The tsunami spawnedby this earthquake ravaged the coastline

and destroyed more than 75% of the

town of Dichato. The AIR models feature

fully probabilistic tsunami modeling that

has been validated against all available

historical events, with a particular focus onthe well-recorded tsunami produced by the

Maule quake.


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LIQUE

FAC

TION

When an area saturated with groundwater

experiences strong ground shaking, the

soil can lose its ability to support structures

in a phenomenon called liquefaction. As aresult, buildings can suddenly tilt or even

topple, and buried utility lines can break.

Recent temblors around the world have

shown that damage due to liquefaction

can increase total losses significantly. The

AIR models explicitly capture liquefaction

risk in the major cities of Chile, Colombia,

Ecuador, Peru, and Venezuela.


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Quito, Ecuador: panoramic view of the historic center (Source: Claude Meisch, Wikimedia)


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EX

POS

URE

The greatest concentrations of exposure

are the densely populated cities of Bogot,

Cali, Lima, Caracas, Medelln, Quito, and

Santiago. The AIR models incorporate

highly detailed industry exposure databases

(IED) at 1-km grid resolution containinginformation on risk counts, replacement

values, occupancies, and construction types

of insurable structures. Industrial facilities

are among the highest value risks in South

America and account for a significant

portion of the insured value in these

countries. The AIR models have separate

damage functions for these facilities and

their individual components.


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The 2010 Maule, Chile, quake caused major building damage in Concepcin. (Source: Claudio Nez, Wikimedia)


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VULNE

RAB

ILITY

The AIR models estimate losses to

residential, commercial, and industrialassets, and to automobiles. These

calculations have been tailored to each

countrys unique building practices and

have been peer-reviewed by local experts

at leading South American institutions.

The models also incorporate findings from

damage surveys, studies of local building

codes, detailed claims data analysis, and

structural engineering research.


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M8.01530 Cumana

M8.31797 Riobamba

M8.71730 Valparaiso

M8.51822 Valparaiso

M8.51687 Lima Callao

M7.71812 Caracas

CHILE

COLOMBIA

ECUADOR

PERU

VENEZUELA

180017001500 1750 18

SIGNIFICANT HISTORICAL EART

2000900


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M7.71868 Ibarra

M8.61906 Esmeraldas

M7.91942 Guayaquil

M7.21998 Bahia

M8.51868 Arica

M8.71922 Vallenar

M8.0

1985 SantiagoM8.2

2014 Iquique

M8.82010 Maule

M7.51875 Cucuta

M7.61958 Frontera con Ecuador

M7.71979 Narino (Cauca)

M6.22001 Armenia

M7.22004Pizarro

M5.61983 Popoyan

M7.41992 Murindo

M8.21940 Lima Callao

M8.11974 Lima

M8.11966 Callao

M8.42001 Arequipa

M7.91970 Chimbote

M8.02007 Pisco

M6.91929 Cumana

M6.61967 Caracas

M7.01997 Cariaco

200019000 1950

HQUAKES IN SOUTH AMERICA


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regulators are revising the countrys set ofrequirements in the spirit of Europes Solvency II. As

these new regulatory regimes take hold, regulators

and capital markets can gain confidence that

companies are well-positioned to survive the next

major earthquake.

The AIR models can be used to manage risk and

satisfy regulatory requirements that base capital

reserves on probabilistic loss estimates.

South Americas insurance markets are experiencingstrong growth. To safeguard this progress,

regulators are looking to establish model-

based capital requirementsa vastly preferable

alternative to standard formulae that can mandate

reserves that are either too large or insufficient

to reflect the actual risk. In Peru, for example,

the Superintendencia de Banca y Seguros (SBS)

requires domestic insurers to assess their risk by

using catastrophe models. In Chile and Colombia,

SUPPORT FOR COMPLIANCE WITH CAPITAL

REQUIREMENTS


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view of shake, liquefaction, and tsunami risk inChile, Colombia, Ecuador, Peru, and Venezuela.

Combined with AIRs Touchstone catastrophe risk

management platform, the new AIR Earthquake

Models for South America are the most advanced

tools the insurance market will use for assessing

earthquake risk in the region.

Where are your concentrations of exposuresrelative to areas of high hazard? Based on detailed

modeling of your portfolio, how likely are different

levels of loss?

To help you answer these questions and truly

own your risk, AIR is releasing new earthquake

models for South America in the summer of 2015.

The models will provide insurers and industry

stakeholders with the most advanced and current

WHATS YOUR RISK?


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ABOUT AIR WORLDWIDE

AIR Worldwide (AIR) is the scientific leader and most respected provider

of risk modeling software and consulting services. AIR founded the

catastrophe modeling industry in 1987 and today models the risk from

natural catastrophes and terrorism in more than 90 countries. More than400 insurance, reinsurance, financial, corporate, and government clients rely

on AIR software and services for catastrophe risk management, insurance-

linked securities, detailed site-specific wind and seismic engineering analyses,

and agricultural risk management. AIR, a Verisk Analytics (Nasdaq:VRSK)

business, is headquartered in Boston with additional offices in North

America, Europe, and Asia. Visit us at www.air-worldwide.com.

2014 AIR Worldwide

Diego Sudamerica

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