Ben Miliauskas, head of Aon Benfield Analytics in Australia/New Zealand, commented: “It is still very soon after the Darfield Earthquake, however we have seen no evidence to suggest that any of the earthquake models we have tested need significant alteration. Whilst the earthquake occurred in a new location, it wasn’t inconceivable given how seismically active New Zealand is.
Underlining this, as we have gone from modelling the potential event loss using the predefined events in the vendor models to their scenarios with more accurate geophysical parameters, we have continuously seen the results decrease. This suggests that the predefined catalogues have accounted for this event, and worse.
Because of the natural peril and demographic distribution in New Zealand, many insurers purchase catastrophe protection using a scenario approach. The key event monitored is the Wellington Earthquake which couples a high natural peril risk with a high population. Recent research has indicated that this event is thought to have a recurrence period of around 750 to 900 years. When viewed on a probabilistic basis this means that most insurers in New Zealand, prudently, purchase to a level beyond many of their international peers. For most clients the Darfield Earthquake will impact their catastrophe reinsurance programmes to the lower to mid layers at best”.
Source : Aon Benfield press Release
