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Earthquake Network Info
Earthquake Network
Earthquake is the least understood of all the insured Natural Disasters. Large, damaging earthquakes happen infrequently and, because they occur without warning, they are difficult to study since we do not know where or when the next one will occur. Because modern earthquake theory is relatively new and evolving, we cannot predict where the next earthquake will strike. However, it is possible to underwrite the peril of earthquake. At General Re, we are constantly refining our earthquake underwriting process taking into account the latest and most up to date research.
We believe that there are three critical components necessary to underwrite the peril of earthquake: Risk Analysis, Risk Mitigation, and Portfolio Management.
Risk Analysis is at the core of a sound underwriting approach. The unique characteristics of each risk must be considered including the building configuration and elevation, the occupancy and how it is protected from shaking, and the seismic exposure to multiple locations. General Re works closely with the engineering and scientific communities to ensure that the Risk Analysis that we do provides us all with the most accurate estimation of the exposures on each account.
A majority of all earthquake losses can be prevented. How can that be? There are only a few truly large earthquakes each year that cause significant structural damage. There are, however, a much greater number of smaller earthquakes that damage the contents in a building and cause an interruption of operations. By focusing attention on Risk Mitigation, a significant reduction in the losses from these more frequent earthquakes can be achieved. The costs of Risk Mitigation can be relatively small. General Re is available to work with our clients to assist them to mitigate their insureds’ seismic exposure.
Portfolio Management is the third component needed to underwrite earthquake. A portfolio’s exposure to loss must be monitored so its accumulations do not exceed the insurer’s ability to meet the potential losses. At General Re, our experience as a worldwide reinsurer and our professional staff are available to work with our clients to help in Portfolio Management.
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