China's major insurance company has completed its first earthquake risk analysis using a U.S. modeling company to make the study.
AIR Worldwide Corporation, the Boston-based risk modeling company, a subsidiary of Jersey City, N.J.-based Insurance Services Office Inc., said today that PICC Property and Casualty Company Limited, the state-owned property-casualty carrier, used AIR's expertise to examine quake risk.
The work, for the company which insures 60 percent of China's p-c market, was coordinated by Guy Carpenter and covers residential, commercial and industrial risks, and construction and erection all risks (CAR/EAR).
"As our business continues to grow, it is essential that we effectively manage our risk from catastrophes," said Mr. Zhang Qing, general manager of the Reinsurance Department at PICC, in a statement.
Mr. Qing added, "Of particular concern is earthquake risk to our many CAR/EAR policies, which currently account for 40-to-50 percent of our total earthquake exposure."
The AIR model involved analysis of damage to China's widely varied building inventory, which includes masonry, reinforced concrete and steel frame buildings. AIR used the results of well-documented engineering studies, information about China's building codes, structural analyses and historical damage data in the analysis.
In addition to the building vulnerability component, AIR's China earthquake model includes a detailed hazard component.
To ensure that this component of the model is built upon the most current scientific findings, AIR said its earthquake team researched local literature and consulted with geophysicists, seismologists, and geologists from major research institutions within the China Earthquake Administration.
The hazard component, AIR said, draws upon China's extensive historical earthquake experience dating back to 780 B.C., as well as detailed paleoseismic, geologic and GPS information, to depict the locations, magnitudes and occurrence rates of potentially damaging future earthquakes.
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