1. Christchurch Earthquakes
Lessons for the rest of the world

2. New Zealand The Christchurch earthquake 2
Doug Dixon | Christchurch Earthquake | CALM 2

3. $22B USD in insured damages
New Zealand
Population 4.2M
76% on North Island
GDP = $112B USD
Main fault line
186 fatalities
$22B USD in insured damages
Approx 12 insurers
NZI & State (IAG)
Vero (Suncorp)
Lumley
Ansvar
Tower
Christchurch
pop. 380,000
Oldest City in NZ – est 1856
99,500 houses/ 30,000 flats
38,000 business units

4. Earthquake or earthquakes?
1. September 4, 2010
2. February 22, 2011
3. June 13, 2011
4. December 23, 2011

5. Comparison to U.S. Earthquakes
Location
Date
Richter Scale
Depth (in KM)
New Zealand
Sept. 4, 2010
7.1 30
Feb. 22, 2011
6.3 5
June 13, 2011 6
Dec. 23, 2011
6.0
6.9
Northridge
Jan. 17, 1994
6.7 17
Loma Prieta
Oct. 17, 1989 18

6. Areas worst affected 22 February 2011

7. Eastern Suburbs Liquefaction and lateral spread

8. Suburb of Bexley
Large scale liquefaction

9. Suburb of Bexley
Large scale liquefaction

10. Port Hills Suburbs

12. Sumner - Return Servicemen's League Club

13. Christchurch CBD looking west

14. Manchester St CBD

15. The Press Building This is the Press Building in the CBD
You can see that it had a conical hat on the tower at the front corner of the building and that it has toppled
What you cant see is that one whole floor at the top is missing. This was a 4 storey building and is now only 3
Note also the cracks lower down and the apparent attempt probably after the September event to "tie" the building together with straps
The Press Building

17. 26 story Grand Chancellor Hotel 176 car parking lot

18. Lessons Learned
What should rest of the world learn from the NZ experience?
Doug Dixon | Christchurch Earthquakes| CALM

19. Industry Lessons Public Awareness of EQ Risk
Insurance Take Up Rate In CA lower than NZ
Accuracy of EQ Models
Models probably do not properly estimate, BI
CBI, liquefaction, and aftershocks
Loss Control Measures
NZ has shown zoning and construction
techniques make a big difference
Insurance to Value
Insurance can work as a risk transfer technique
for earthquake exposure if priced correctly and
is accessible to consumers
* Swiss Re white paper "Lessons From Recent Major Earthquakes" addresses these issues in more depth
"Ring Of Fire"

20. Claim Lessons Surprises do happen Staffing too lean
Training happened "on the job"
Engineers in short supply
Allocation to events can be an issue
Cooperation within industry can be helpful
Longer than expected BI and ALE claims
Insurers became sloppy at record keeping
Neighboritis
Your staff may be personally impacted by the EQ
Infrastructure needs for on site claims staff
Set expectations, communicate with your customers

21. Conclusions Low frequency and short memories lead to
incorrect perception that EQ risk is low.
An EQ catastrophe is probably inevitable
in many parts of North America.
Many lessons can be learned from the
NZ EQ experience that insurers in North
America can use to serve our customers
and mitigate future losses.
Remember the past, plan for the future.

22. Thank you

23. Legal notice
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Although all the information used was taken from reliable sources, Swiss Re does not accept any responsibility for the accuracy or comprehensiveness of the details given. All liability for the accuracy and completeness thereof or for any damage resulting from the use of the information contained in this presentation is expressly excluded. Under no circumstances shall Swiss Re or its Group companies be liable for any financial and/or consequential loss relating to this presentation.