Insurance industry advances a national strategy on earthquake response
OTTAWA, Oct. 29, 2013 /CNW/ - A new scientific study on the impact of a
major earthquake in Canada, released in Ottawa today by Insurance
Bureau of Canada (IBC), leaves no doubt that Canada is not prepared to handle a major earthquake, which could happen at any time, and that the economic impact would be significant.
IBC commissioned the study by AIR Worldwide, global experts in
catastrophe modeling. The study is a peer-reviewed analysis of the
impact of two major seismic events: one in British Columbia (western
scenario) and the other in the Quebec City-Montreal-Ottawa corridor
"The findings will help us raise awareness of the need to plan for, and
mitigate the risks of a major earthquake," said Don Forgeron, IBC
President and CEO. "The study is a valuable tool and will be shared
with governments, regulators, disaster preparedness organizations, the
banking community, the insurance industry, and the public."
The study modeled two earthquake events. The western scenario shows the
effect of a 9.0-magnitude earthquake off the west coast. Overall
economic losses in that scenario total almost $75 billion. The eastern
scenario shows the effect of a 7.1-magnitude earthquake near Quebec
City. In that scenario, overall economic losses total almost $61
billion. Although these two seismic zones cover only a small fraction
of Canada by area, 40% of Canadians live within them.
"The risk of a major earthquake affects us all, not just those living in
high-risk areas," said Mr. Forgeron. "Events of this magnitude have a
domino effect on the Canadian economy triggered by property damage,
supply chain interruption, loss of services, infrastructure failure and
"Insurers, governments and all Canadians have a responsibility to
prepare," said Mr. Forgeron. "If a mega-earthquake should strike in a
densely populated area, insurance alone will not pay for all the
damage. Governments and consumers have a role to play."
"The good news is that positive action reduces the risks," added Mr.
Forgeron. "The study we released today tells us that mitigation - such
as more resilient building and infrastructure - can further reduce
economic losses by a third or more. That's why we are calling for an
integrated preparatory approach to the earthquake threat."
To that end, IBC is advancing a national conversation on how to prepare
for a mega-earthquake, which is a greater than 1-in-500-year event and
exceeds the industry's capacity to respond. IBC wants to work closely
with governments, the financial services industry and non-government
organizations to ensure that a national response framework is in place
before such an earthquake hits.
"We believe this will be part of a thoughtful and integrated approach
that ensures the best outcomes for Canadians," Mr. Forgeron said.
"Preparing for a major earthquake must be guided by sound research. The
AIR study provides just that."
"AIR was honoured to be selected by IBC to collaborate on this
comprehensive study that will help raise awareness of earthquake risk
throughout Canada," said Dr. Jayanta Guin, Senior Vice President of
Research and Modeling at AIR Worldwide. "As a direct result of this
collaboration, our newly updated Canadian earthquake model provides the
most complete view of seismic risk to residential, commercial and
industrial properties and infrastructure."
For the executive summary of the report:
For the full report:
For photo simulations of an earthquake in both seismic zones:
About Insurance Bureau of Canada
Insurance Bureau of Canada is the national industry association
representing Canada's private home, car and business insurers. Its
member companies represent approximately 90% of the private property
and casualty (P&C) insurance market in Canada. The P&C insurance
industry employs 118,600 Canadians, pays more than $7 billion in taxes
to the federal, provincial and municipal governments, and has a total
premium base of $46 billion.
To view media releases and other information, visit the media section of
IBC's website at www.ibc.ca. Follow IBC on Twitter @InsuranceBureau or like us on Facebook.
SOURCE: Insurance Bureau of Canada
For further information:
Insurance Bureau of Canada
Insurance Bureau of Canada
T: 416-362-2031 ext. 4312