Global professional services firm Aon, has announced the launch of a new probabilistic catastrophe model to quantify loss potential for earthquake risk in Canada.
Developed by the broker’s Impact Forecasting team, the model represents the outcome of a collaboration with the Global Earthquake Model (GEM) Foundation, of which Aon recently became a governor sponsor.
Aon noted that the catastrophe model is based on the latest scientific research from Natural Resources Canada (NRCan), which published a sixth-generation Seismic Hazard Model for Canada’s 2020 National Building Code.
Recent Impact Forecasting data has shown that global cumulative earthquake damage since 2000 exceeded $1 trillion by the end of 2022. While earthquake damage in Canada has been relatively low, the peril remains a major concern for the country.
The new model also combines the latest seismic hazard model for Canada, implemented by NRCan natively in GEM’s OpenQuake platform, with Impact Forecasting’s enhancements for secondary perils, including liquefaction, landslides, tsunami and fire following earthquake.
Additionally, the model is also available for loss modelling in Impact Forecasting’s ELEMENTS platform, as well as Oasis-based platforms such as Nasdaq Risk Modelling for Catastrophes.
The model also provides a range of outputs, which includes annual aggregates and probable maximum loss estimates for single risks and a portfolio of properties. Clients also have the ability to leverage the high-resolution hazard and risk maps for detailed underwriting and risk assessment.
Adam Podlaha, global head of Impact Forecasting, said: “We are excited to continue our work with GEM in developing new Impact Forecasting earthquake models, as well as enabling clients to access GEM-developed models within Impact Forecasting’s ELEMENTS platform. Our recently released Canada Earthquake model shows the collaborative power of our community to help navigate this form of volatility.”
Sonia Talwar, director, Natural Resources Canada (NRCan), public representative to GEM Governing Board for Canada and GEM Governing Board vice-chair, added: “The GEM-Impact Forecasting Canada earthquake risk model demonstrates how we can further the understanding of earthquake risk in Canada with open source information available and accessible in Canada. We are pleased to see our foundational earthquake hazard and risk work extended and applied for risk reduction.”
Podlaha, concluded: “We have chosen to work with GEM because of its global reputation for open and high-quality science and engineering-based risk modelling, combined with its close collaboration with Natural Resources Canada. In addition, we are excited to bring enhanced understanding of the earthquake risk to the insurance industry, with a goal of ultimately increasing resilience across Canada.”
