The growing threat of natural catastrophes raises serious concerns for the insurance industry and corporate risk managers, according to Willis Research Network Chairman Rowan Douglas.

“A changing climate, an imperfect understanding of seismic hazards, new vulnerabilities and shifting patterns of exposure provide plenty of challenges for those trying to manage and underwrite extreme events,” he said.

Mr Douglas says California, which sits on the San Andreas Fault, has a 99.7% chance of a magnitude-6.7-plus quake in the next 30 years, according to the Working Group on California Earthquake Probabilities.

A repeat of the huge 1906 San Francisco earthquake could cause total losses of $US69 billion ($67.31 billion), it is predicted.

The number of damaging earthquakes is reportedly rising in countries with high levels of life expectancy, education and income – but insurance coverage remains low, paying for about 7.5% of all quake losses last year.

“Uncertainties persist but the science and tools we build upon them are providing a fundamental platform for our understanding,” Mr Douglas said.

“The final lesson remains the same: be prepared, flexible and adaptable for the unexpected.”

Population density, urbanisation and globalisation have left the world increasingly connected, according to Willis Global Solutions Consulting Group CEO Phil Ellis.

“A catastrophe in a far-off locale is no longer a remote risk; it could have an immediate impact on a company’s operations.

“Risk modelling can help companies understand, quantify and articulate threats to the bottom line, which in turn helps them plan and prepare for these scenarios.”