Earthquakes are generally regarded as the most destructive force of nature. While a long-term world-wide comparison shows that the number of deaths and the magnitude of economic losses caused by storms and floods by far exceed those by earthquakes, it is nevertheless true to say that no other natural phenomenon creates such a massive psychological shock. Since they are capable of causing severe damage over relatively large areas, earthquakes obviously have an enormous destructive potential. This was confirmed by the earthquakes in Northridge (California) in 1994 and in Kobe (Japan) in 1995. The losses were US$ 44 billion and US$ 100 billion respectively. The possible total cost of a major earthquake occurring today in California is estimated to be US$ 300 billion and in Tokyo even as high as US$ 1,000 to 3,000 billion. There are also a large number of regions with high concentrations of population and economic activity that are situated in zones of high seismic activity. For the insurance industry in particular, the problem of accumulated losses, which could threaten economic ruin, is therefore rapidly becoming a matter of great urgency. In view of this situation, it is essential to have an objective picture of the exposure to this hazard

Indeed, only on this basis can appropriate precautionary measures be taken – for example realistic premium calculations, accumulation control and the establishment of reserves or structural improvements to buildings and restrictions on land use.

 

More than 90% of earthquakes occur in regions where large tectonic plates meet. The relative motion of the adjacent plates is used to define three types of plate boundary:

• Convergence zones: Here plates collide and the specifically heavier (generally the oceanic plate) is subducted under the lighter (generally the continental plate). Example: the subduction of the Nazca plate under the South American continent.
• Divergence zones: Here plates move apart as a result of the formation of new crust on oceanic ridges and the continental trench zones. Example: the Mid-Atlantic ridge.
• Transform faults: Here plates move past each other horizontally. Example: the Mid-Atlantic ridge and San Andreas fault in California.

It seems self-evident that the most severe earthquakes should occur in convergence zones where there is a large variation in the stress profile. Convergence zones are followed by transform faults and divergence zones. There are areas where volcanic activity occurs as an immediate consequence of plate movement. In this case too, there is a correlation with exposure. Volcanic activity in convergence zones is explosive (ash and glowing clouds), but is effusive in divergence zones (lava streams).

 

Richter Magnitudes	Earthquake Effects
Less than 3.5	Generally not felt, but recorded.
3.5-5.4	Often felt, but rarely causes damage.
Under 6.0	At most slight damage to well-designed buildings. Can cause major damage to poorly constructed buildings over small regions.
6.1-6.9	Can be destructive in areas up to about 100 kilometers across where people live.
7.0-7.9	Major earthquake. Can cause serious damage over larger areas.
8 or greater	Great earthquake. Can cause serious damage in areas several hundred kilometers across.

Although each earthquake has a unique magnitude, its effects will vary greatly according to distance, ground conditions, construction standards, and other factors. Seismologists use a different Mercalli Intensity Scale to express the variable effects of an earthquake. Each earthquake has a unique amount of energy, but magnitude values given by different seismological observatories for an event may vary. Depending on the size, nature, and location of an earthquake, seismologists use several different methods to estimate magnitude. The uncertainty in an estimate of the magnitude is about plus or minus 0.3 units, and seismologists often revise magnitude estimates as they obtain and analyze additional data.

 

In seismology a scale of seismic intensity is a way of measuring or rating the effects of an earthquake at different sites. The Modified Mercalli Intensity Scale is commonly used in the United States by seismologists seeking information on the severity of earthquake effects. Intensity ratings are expressed as Roman numerals between I at the low end and XII at the high end. The Intensity Scale differs from the Richter Magnitude Scale in that the effects of any one earthquake vary greatly from place to place, so there may be many Intensity values (e.g.: IV, VII) measured from one earthquake. Each earthquake, on the other hand, should have just one Magnitude, although the several methods of estimating it will yield slightly different values (e.g.: 6.1, 6.3).

Ratings of earthquake effects are based on the following relatively subjective scale of descriptions:

Modified Mercalli Intensity Scale

I	People do not feel any Earth movement.
II	A few people might notice movement if they are at rest and/or on the upper floors of tall buildings.
III	Many people indoors feel movement. Hanging objects swing back and forth. People outdoors might not realize that an earthquake is occurring.
IV	Most people indoors feel movement. Hanging objects swing. Dishes, windows, and doors rattle. The earthquake feels like a heavy truck hitting the walls. A few people outdoors may feel movement. Parked cars rock.
V	Almost everyone feels movement. Sleeping people are awakened. Doors swing open or close. Dishes are broken. Pictures on the wall move. Small objects move or are turned over. Trees might shake. Liquids might spill out of open containers.
VI	Everyone feels movement. People have trouble walking. Objects fall from shelves. Pictures fall off walls. Furniture moves. Plaster in walls might crack. Trees and bushes shake. Damage is slight in poorly built buildings. No structural damage.
VII	People have difficulty standing. Drivers feel their cars shaking. Some furniture breaks. Loose bricks fall from buildings. Damage is slight to moderate in well-built buildings; considerable in poorly built buildings.
VIII	Drivers have trouble steering. Houses that are not bolted down might shift on their foundations. Tall structures such as towers and chimneys might twist and fall. Well-built buildings suffer slight damage. Poorly built structures suffer severe damage. Tree branches break. Hillsides might crack if the ground is wet. Water levels in wells might change.
IX	Well-built buildings suffer considerable damage. Houses that are not bolted down move off their foundations. Some underground pipes are broken. The ground cracks. Reservoirs suffer serious damage.
X	Most buildings and their foundations are destroyed. Some bridges are destroyed. Dams are seriously damaged. Large landslides occur. Water is thrown on the banks of canals, rivers, lakes. The ground cracks in large areas. Railroad tracks are bent slightly.
XI	Most buildings collapse. Some bridges are destroyed. Large cracks appear in the ground. Underground pipelines are destroyed. Railroad tracks are badly bent.
XII	Almost everything is destroyed. Objects are thrown into the air. The ground moves in waves or ripples. Large amounts of rock may move.

Generally, the intensity values refer to average subsoil conditions (firm sediments). Local subsoil conditions may result in exposure differences in areas too small to be visible on a world map. The following table states the mean change in intensity for various subsoil conditions. These changes only apply to particular sites. If used for larger areas, they should be reduced according to the type of subsoil generally found in the area.

Subsoil	Mean change in Intensity
Rock (e.g. granite, gneiss, basalt)	-1
Firm sediments	0
Loose Sediments (sand, alluvial deposits)	+1
Wet sediments, artificially filled ground	+2

The intensification effect of soft subsoil is partially due to a shift in ground motion to longer oscillations which are potentially more destructive in relation to buildings. This effect is greater further away from the epicenter than it is close to it. Depending on the thickness of the sediment layer, there may be resonance effects which amplify ground movements several times within a narrow frequency spectrum (well-known example: Mexico City)

 

Seismic sea waves, generally referred to by the Japanese word “tsunami”, occur after strong seaquakes or large submarine landslides often induced by earthquakes or volcanic eruptions in the sea or on the coast. Theses waves spread out in all directions at great speed which depends on the depth of the water. In the great oceanic basins the mean speed is about 700 km/h. Although the waves are hardly noticeable in the open sea, they reach gigantic proportions in deep coastal waters, especially in narrow bays (in shallow waters they die before they even reach the coast). In Hawaii and Japan for example, waves of this kind suddenly hitting the coastline have been known to reach 30m in height, destroying long sections of the coast. As the waves can travel 10,000 km or more without much attenuation, regions that have not experienced any direct earthquake effects can be affected (e.g. Japan by the Chile earthquake in 1960). This is why a tsunami early warning service has been set up for the whole circum pacific zone. Exposure is limited to regions directly on the coast, but under worst case conditions may extend several km inland. With a rapidly increasing number of major industrial areas and large hotels being built along coastal regions, the tsunami risk has become considerably higher.

 

There are three classes of volcanoes:
• Class A: Last eruption before 1800 AD
• Class B: Last eruption after 1800 AD
• Class C: Volcanoes which are categorized as particularly dangerous by the International Association of Volcanology And Chemistry of the Earth’s Interior (IAVCEI)

Class A volcanoes are often commonly held to be extinct, but to assess volcanic activity periods as long as hundreds or even thousands of years are required. An example that illustrates this is the eruption of Pinatubo on the Philippines. Before the eruption in 1991, the last time it became active was 600 years previously. The volcano El Chichon in Mexico was considered to be totally extinct before it erupted in 1983.

There are several risk factors associated with volcanoes, the principal being:
• Ashfall
• Tidal waves
• Lava and mud flows
• Glowing clouds
• Volcanic earthquakes

These phenomena vary from volcano to volcano. Whereas ashfalls and tidal waves can cause damage over relatively large areas, the other phenomena only present a danger to the area in the immediate vicinity of the volcano and so are easier to record. The spread of ash depends on the direction and force of the wind and so the risk for regions further afield is difficult to estimate. The impact of tidal waves, caused by volcanic eruptions under lakes, seas and on the coast is comparable with that of seismic sea waves. All the phenomena that have been referred to have a great potential to cause damage as the history of natural catastrophes tells us.

It is however, very difficult to assess and, as is the case with earthquakes, classify the actual exposure. On the one hand, eruptions are usually too rare for reliable statistical analysis and on the other classification in terms of the latest instruments to make short and medium term predictions would seem to be considerably more promising than the same approach with earthquakes as a few successful cases (Rabaul, Montserrat) show.

 

© Munich Re “Natural World of Hazards”