Bay Area must be prepared for a major earthquake, warns RMS
An earthquake of the magnitude of the Loma Prieta quake, which struck on October 17, 1989, would cost: $38 billion in economic losses, and $4 billion in insured losses, if it struck in the same place, according to RMS.
The earthquake that struck 30 years ago caused $6 billion in economic losses, of which $902 million were insured, RMS said.
The global risk modeling and analytics firm admitted that there will not be an identical earthquake to Loma Prieta, but warned a similar strength one, of Mw 6.9 or higher, could hit the Bay Area. The chance of such an earthquake happening within the next year is 5.3 percent, it said, characterising the risk as “very high”.
RMS noted that increased productivity has transformed the risk landscape in that area. “In 2017, the San Francisco Bay Area was the 19th largest economy in the world with a GDP of $748 billion,” it said. “This means more buildings in the same area, increasing the likelihood of substantial damage.”
It added: “If the Loma Prieta event were to happen again today, the headquarters of six of the world’s ten largest technology companies, according to Forbes, would experience strong shaking,” meaning MMI greater than six.
As well as new companies, there has also been considerable population growth in the area affected by the Loma Prieta earthquake. The eight counties most heavily affected - San Francisco, San Mateo, Santa Cruz, Monterey, San Benito, Santa Clara, Alameda and Contra Costa - have added almost two million residents, said RMS, a growth of nearly 35 percent.
In addition, there is now an increased protection gap, said RMS. “With a relatively low insurance penetration of about 10 percent, a significant portion of homes are not adequately protected and will take longer to rebuild which will disrupt communities and the region’s economic output.”