Home / Local / IAG takes up new earthquake model for New Zealand
9 September 2019
IAG NZ has licensed a new earthquake model for New Zealand from Boston-based AIR Worldwide to help manage its catastrophe risk.
AIR Worldwide revised its New Zealand modelling to include the latest scientific research gathered from the Canterbury catastrophes in 2010-11 and Kaikoura in 2016. The catastrophe modeller has also added post-quake sub-perils such as ground shaking, liquefaction, landslide, tsunami and fires.
“AIR provides a scientifically credible view of risk,” IAG NZ Peril Pricing Manager Philip Conway said. “As the largest insurer in New Zealand, we pride ourselves on being able to differentiate between risks based on their location, building type, occupancy, age, and other parameters that drive vulnerability.”
IAG NZ trades under the State, NZI, AMI and Lumley Insurance brands.
The latest AIR model has been expanded to include large industrial facilities, infrastructure, marine cargo and construction. It is the first AIR quake model to support land damage, because New Zealand residential policies cover land under homes or outbuildings, land necessary to support the structure and driveway land.
The modelling includes the capability to use two seismicity models for the region. One is a time-independent model with no memory of past rupture history; the other is a time-dependent model that considers historical or prehistorical ruptures of specific seismic sources.
Between September 2010 and the end of 2011, four major earthquakes and more than 11,200 aftershocks shook Christchurch in the biggest insured event in New Zealand history.
To date, the combined events have cost private insurers more than $NZ21 billion ($22.45 billion) and at current premium rates, it would take private insurers about 40 years to pay off the cost.