Willis Becomes Sponsor For GEM

Insurance broker Willis Group Holdings said it has joined other businesses to sponsor the Global Earthquake Model (GEM), a five-year initiative of the Organization for Economic Co-operation and Development (OECD) to produce the world's first earthquake model.

The model is aimed at building comprehensive and consistent coverage around the world, including developing countries where no reliable models exist today, Willis said.

Willis is the first reinsurance broker to support GEM, joining its governing board whose members include a number of insurance firms, including Munich Re.

A spokesman for the OECD said other sponsors include Zurich Financial Services and the catastrophe risk modeling firm AIR Worldwide.

Willis pointed out that over the past decade over half a million people have died due to earthquakes and tsunamis. Most of the deaths were in the developing world, and world population growth is increasing that risk. However, in many seismic regions, no hazard models exist, creating significant barriers to awareness, risk mitigation and emergency response, Willis said.

GEM, it was explained, is an open source global earthquake model aimed at creating an independent standard to calculate and communicate earthquake risk, raise awareness, promote mitigation, and stimulate insurance and risk sharing.

As part of its sponsorship of the initiative, Willis will contribute scientific research into seismic risk through its Willis Research Network.

Rowan Douglas, managing director, Willis Re and chairman of the Willis Research Network, said in a statement that the model “is key to saving lives, guiding public policy, protecting property and liberating capital from national catastrophe pools to [provide] micro-insurance to finance this risk.”

GEM will also bring significant benefits to seismic risk management in the United States and other developed economies, noted Julie Serakos, executive vice president, Willis Re, because it will be available to all parties interested in predicting and responding to major earthquakes and their financial implications.

(This story was updated on Oct. 17 at 10:18 a.m.)