Risk Management Solutions has expanded its coverage of earthquake modelling in Europe
Risk Management Solutions (RMS) has launched an extensive new model for earthquake risk in Europe.
Believed to be the most comprehensive model of its type, the countries covered include Austria, Belgium, Germany, Italy and Switzerland, as well as the smaller territories of Liechtenstein and Monaco.
Building on an updated version of the Italy Earthquake Model, the RMS Europe Earthquake Model uses the latest scientific processes to help insurers and reinsurers underwrite their policies and gain a more complete view of their portfolio risk.
The model captures the correlation of seismic hazard across country boundaries, providing a consistent framework for risk assessment in Europe and allowing users to make direct comparisons between countries and review risk on a region-wide basis.
As well as in Italy, where seismic risk is relatively high, a number of moderate earthquakes have caused damage across Austria, Belgium, Germany, and Switzerland. One of the most devastating events occurred in Basel in 1356, with a magnitude in the range of 6 to 6.9. Some scenarios modeled by RMS suggest that if a similar earthquake were to occur today economic losses in Switzerland and Germany combined could exceed EUR50 billion. The uncertainty around recurrence of such events, together with the potential levels of loss, has led to increasing concern over earthquake risk in Europe.
"Even an earthquake of moderate magnitude could cause severe damage and disruption in Europe, due to its high-value exposure. To manage portfolio risk effectively, insurers and reinsurers need to be able to assess the impact of these infrequent but potentially devastating events," said Joerg Mueller, vice president of RMS Continental Europe.