Three years after the Canterbury earthquakes New Zealand leads the world in research on land damage from liquefaction, a Risk Management Solutions (RMS) seminar has heard.

Liquefaction was a key cause of loss in the quakes, RMS Director of Product Management Laurel Di Silvestro told the forum in Sydney last week.

“A lot of effort has gone into understanding the causes of this problem in this region,” she said. “It’s one of the only areas of the world where this much data is being collected.”

Catastrophe modeller RMS has joined forces with engineering group Tonkin and Taylor to research liquefaction. It plans to publish a paper on the problem, as well as a report on large quakes.

Research is also being conducted in Salt Lake City in the US, and “other academic institutions are getting on board”, Ms Di Silvestro says.

In New Zealand liquefaction may have been influenced by large ground motions that were underestimated for areas up to 10km kilometres from the quakes’ epicentre and over-estimated for those further away.

Research is examining soil types, the water table and other factors, such as the 2400 boreholes in the affected region.

The quakes caused $NZ30 billion ($27.64 billion) of losses, with 50% of claims settled.

“It’s fair to say that market reaction is still evolving,” Ms Di Silvestro said. Both the Reserve Bank of New Zealand and the Australian Prudential Regulation Authority are examining proposed catastrophe risk solvency standards. See other story

Premium pricing “went through the roof” in New Zealand after the quakes, while reinsurance contracts proved difficult to obtain.

Despite this, policy terms and conditions remain largely unchanged and “market forces continue to influence pricing after the highs of 2012”.

The impact on the claims community has been to examine new vulnerabilities, Ms Di Silvestro says.

RMS is to establish an economic database that measures insurance industry exposure to all perils in New Zealand and can be used for industry benchmarking. It is also building a “unified earthquake framework”, using data from New Zealand, Japan and North America.

Scientists, engineers, government and insurers have collaborated on quake studies. RMS hosted a workshop last November in New Zealand for insurers, catastrophe modellers and others. “We hope it will be the first of two or three,” Ms Di Silvestro said.

Key drivers of the quakes are still being assessed. “We have a lot of data, but it’s very complicated and in some cases not perfect.”