The updated model is a major step forward in managing earthquake risk, benefiting from an immense volume of new scientific research and data to provide the most comprehensive and granular view of seismic risk
Newark, CA (June 13, 2017) – RMS, a global risk modeling and analytics firm, today announced the release of its version 17.0 RMS North America Earthquake Models, covering the United States, Canada, and Mexico. RMS invested over 100 person-years of research and development into its comprehensive release, which now offers the highest quality implementation of earthquake science and data available in the (re)insurance industry. The updated model will enable RMS clients to manage their risk accumulations with more confidence and underwrite a better book of business.
“The quality of the updated model is extraordinary and we overcame significant technical and computational challenges to deliver one which is suitable for not only portfolio management and risk transfer, but individual, more granular risk selection – all on a consistent and coherent basis,” said Mohsen Rahnama, chief risk modeling officer at RMS. “The model affords clients the rigorous insights needed to use capacity more efficiently, and successfully compete in today’s market environment.”
The reference point for the updated RMS® United States Earthquake Model is the U.S. Geological Survey (USGS) 2014 national seismic hazard model, which incorporates the most comprehensive representation of earthquake hazards to date. Not only did RMS actively collaborate with the USGS, its implementation preserved fidelity to the USGS model while maintaining practical run-times without taking short-cuts. The developers achieved this by using a rich, optimized selection of the potential events across the spectrum. It means, for example, that the modeled average annual loss (AAL) and return period hazard in the RMS model remain true to those predicted by the full USGS event set – as does the tail risk.
A key insight of the updated RMS model is that it captures what is now understood to be the potential for larger and more correlated seismic events in California, as well as new views of risk across all the regions of the U.S. The model now includes induced seismicity, making it the first available tool on the market for analyzing property risks from man-made earthquakes across Oklahoma, Kansas, Ohio, Arkansas, Texas, Colorado, New Mexico and Alabama. This functionality will allow clients of RMS to consider risks from earthquakes linked to oil and gas extraction.
The RMS® Canada Earthquake Model incorporates an updated historical earthquake catalog, spanning nearly 400 years, and other hazard data from the Geological Survey of Canada. The model includes all ten provinces as well as the three Canadian territories. It also features a new Vancouver Basin Model to better capture the complex shaking amplification caused by the deep layers of soft, sedimentary rock in the area, in addition to a new suite of tsunami accumulation footprints for the west coast of Canada. This feature is also included in the U.S. Model for the west coast of the U.S.
The RMS® Mexico Earthquake Model includes an updated, time-dependent view of the Mexico Subduction Zone that considers recent earthquakes and their impact on the likelihood of future events. In addition, there is increased definition of regional vulnerability in design and building practices, including seven micro-zones in Mexico City, with vulnerability regions at 100-meter resolution.
The framework for all three North America Earthquake Models is consistent, to offer firms greater ability to differentiate risk across the U.S., Canada and Mexico, using the new high resolution approach to characterizing local soil conditions and their impact on ground motion amplification. RMS has also invested huge resources in an improved liquefaction model for the U.S., Canada and Mexico, that leverages data from billions in claims made following the Canterbury Earthquake Sequences in New Zealand, the second most expensive insured earthquake loss ever, globally.
RiskLink Version 17.0 updates are concurrently available within Risk Modeler on the RMS(one)® platform.
Further details of how RMS implemented the latest USGS research and data in its version 17.0 North America Earthquake Models can be found here.
RMS solutions help insurers, financial markets, corporations, and public agencies evaluate and manage catastrophe risks throughout the world. We lead an industry that we helped to pioneer—catastrophe risk modeling—and are delivering models, data, and risk management solutions on the RMS(one)® platform to transform the world’s understanding and quantification of risk through open, real-time exposure and risk management.
More than 400 insurers, reinsurers, trading companies, and other financial institutions trust RMS solutions to better understand and manage the risks of natural and human-made catastrophes, including hurricanes, earthquakes, floods, terrorism, and pandemics.
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