New Zealand’s Earthquake Commission (EQC) has said that ongoing investment in natural hazard science, including the geological hazard monitoring service GeoNet, is key to maintaining the confidence of international reinsurance markets in providing coverage for the country.
Fraser Gardiner, Chief Financial Officer at the EQC, noted that the GeoNet platform not only provides invaluable data to scientists, but also enables the Commission and private insurers to create sophisticated loss modelling to understand risks and potential losses in a natural disaster.
The GeoNet phone app is used by hundreds of thousands of New Zealanders when they feel the Earth moving to check the location and strength of any earthquake.
“International reinsurers rely on loss models to assess whether or not to provide cover for New Zealand and how much they need to charge in premiums,” Gardiner commented.
“It has therefore been incredibly important for EQC to provide a specific New Zealand-view of our risks that can be compared to other models developed by a number of US-based companies,” he continued.
“Understanding our natural hazards and their potential impact is vital for New Zealand’s physical and economic security.”
The data from GeoNet and insights from the science funded by EQC and others enables modelling experts to update the risk models that estimate the potential financial cost of a wide range of earthquake events.
The EQC is currently transitioning to a new loss modelling platform, called RiskScape, that will support the inclusion of the latest research and a wider range of natural hazards.
Last year, the Commission invested around $22 million into natural hazard research, of which an overwhelming majority was allocated to GeoNet.
Over the past 20 years, EQC has invested $189 million to allow GeoNet to record and collect data on earthquakes, tsunamis, volcanic activity and landslides that underpins its mission to reduce the impact on people and property when natural disasters occur.
And Gardiner says that reliability of the data and our risk models has become an invaluable asset when EQC engages with international reinsurers to underwrite a substantial portion of its EQCover programme.
Early this month, EQC confirmed reinsurance cover of nearly $7 billion for the 2021/22 financial year.