Bermuda reinsurers with exposure to earthquake risks in California may be forced to reassess their exposures in the region following a new report that suggests potential losses in the region could be double what was previously thought.
CoreLogic has produced an earthquake risk analysis that suggests that a single large earthquake along the San Andreas Fault line could rupture simultaneously in both Northern and Southern California, which would potentially cause 126 percent more residential property damage than previous estimates suggest.
Ruptures on the north and south of the San Andreas Fault had previously been viewed as mutually exclusive of one another.
An earthquake of magnitude 8.0 or higher will affect a larger land area and greater number of people should an earthquake happen simultaneously on the northern and southern San Andreas faults.
CoreLogic has produced an earthquake risk analysis that illustrates the higher conditional probability of losses for an earthquake impacting both regions simultaneously.
The risk analysis is based on four earthquake scenarios and the resulting increase in both the number of single-family homes that could be damaged and the accompanying reconstruction cost value (RCV).
A magnitude 8.3 earthquake along the San Andreas Fault could result in a full rupture and increase the number of homes damaged by 126 percent, from 1.6 million to 3.5 million homes, and increase RCV by 79 percent, from $161 billion to $289 billion.
Another scenario that expands earthquake risk from just the southern San Andreas Fault to a full rupture increases the number of homes damaged by 54 percent, from 2.3 million to 3.5 million, and increases RCV by 111 percent, from $137 billion to $289 billion.
CoreLogic, North America, Bermuda, Insurance, Reinsurance, Catastrophe, Cat losses, Earthquake, Risk management, Property, Casualty, San Andreas Fault