RMS issues new models to cover regional earthquake risks

Catastrophe modeller Risk Management Solutions (RMS) has issued 16 new and updated earthquake models for Latin America, which it said bridges the gap in demand for detailed risk analysis in the region. The models focus on countries with the highest seismic risk and property exposure – including Mexico, which has the most insured earthquake exposure in Latin America – and enable insurers and reinsurers to assess risk on a country-by-country and region-wide basis. “Latin America is increasingly attracting attention from both international and domestic insurers due to its high earthquake hazard and its property exposure, which has burgeoned with the economy in recent years,” said Sahar Safaie of RMS. “As the market becomes more sophisticated, the demand for risk management tools is growing. Government regulations in Mexico, Peru, and Colombia, expected to filter through to other Latin American countries, are also increasing the need for insurers to gain an even deeper understanding of their risk.” According to RMS, if an earthquake the magnitude of the 1985 Michoacan quake, which caused economic damage of $4bn, struck today the economic loss could be as much as $10bn. Models for Mexico and Colombia have been updated, with a minor update to the recent Chile model. RMS has released new models for Belize, Costa Rica, El Salvador, Guatemala, Honduras, Nicaragua, and Panama. In South America, models are now available for Venezuela, Peru, Ecuador, Brazil, Bolivia, and Argentina.