Posted on 10 Sep 14 by Neilson
Impact Forecasting, the catastrophe model development center of excellence at Aon Benfield, today releases the latest edition of its monthly Global
Catastrophe Recap report, which reviews the natural disaster perils that occurred worldwide during August 2014. Aon Benfield is the global reinsurance
intermediary and capital advisor of Aon plc.
The report reveals that the strongest earthquake to strike the U.S. San Francisco Bay Area in 25 years was recorded on the morning of August 24, injuring
at least 258 people and causing widespread damage to property, infrastructure, and wineries. Total economic losses from the event were expected to breach
USD2.0 billion, with insured losses likely to be in the hundreds of millions of dollars (USD) due to the low residential earthquake insurance penetration
in Napa County and the locality. Napa County has a residential earthquake insurance penetration rate of 5.3% compared to the average of ~10% seen in
The magnitude-6.0 tremor had an epicenter located 6.0 kilometers (3.7 miles) northwest of American Canyon, California. In the city of Napa alone, at least
1,120 homes and other buildings were structurally damaged.
Meanwhile, a USGS-registered magnitude-6.1 earthquake struck Yunnan Province in southwest China on August 3, killing at least 617 people and injuring more
than 3,143 others. Total economic losses were forecast to be at least CNY38.5 billion (USD6.3 billion), with the heaviest impact sustained near the
epicenter in Ludian County. The Ministry of Civil Affairs (MCA) indicated that more than 25,800 homes collapsed and an additional 200,000 sustained varying
levels of damage.
Earthquake events were also recorded in Peru, Ecuador, Iran, Algeria, and South Africa during August.
Steve Bowen, associate director and meteorologist within Aon Benfield's Impact Forecasting team, said: "Despite the upcoming historical peaks of the
Atlantic and Pacific tropical cyclone seasons, earthquakes were the primary focus during the month of August; especially following the magnitude-6.0 event
in Northern California's Bay Area. Residential earthquake insurance penetration rates have gradually lowered in California during the past two decades from
33 percent in 1996 to roughly 10 percent today, and the August 24 Napa County event serves as a reminder of the unpredictability and costly impacts of the
peril. While not expected to be as costly to insurers as the Northridge event in 1994, and possibly Loma Prieta in 1989, the Napa event proves the need of
consistently analyzing the risks associated with U.S. earthquakes through such avenues as catastrophe modeling."