Bermuda’s insurers and reinsurers will be watching the situation in New Zealand with interest, after a big earthquake and series of aftershocks hit the county on the weekend.
The last major earthquakes to hit New Zealand, in 2011/12, ended up costing the international re/insurance industry almost $20 billion.
A magnitude 7.8 earthquake struck New Zealand's South Island just after midnight, local time, on Monday November 15, about 93 km north northeast of Christchurch.
This has since been followed by a series of aftershocks, the biggest of which has registered with a magnitude of 6.3.
According to catastrophe modelling firm AIR Worldwide, shaking was felt as far away as the nation's capital, Wellington, at the southern end of the North Island and 215 km (133 mi) from the epicenter.
Communications with towns closer to the epicenter have been difficult, but aerial images show a tunnel along the coastal highway to Kaikoura covered by a landslide. A large river dammed up by a landslide also breached its banks, sending a deluge of water downstream.
Other photos show large cracks in roads, goods knocked off shelfs, and broken glass. Images show some structural damage and considerable damage to contents.
Schools and businesses throughout the country are closed Monday so that buildings can be assessed for safety.
According to AIR, seismic design codes in New Zealand have set stringent requirements for new buildings, and many cities have initiated a comprehensive policy to identify vulnerable pre-1976 buildings with the goal of retrofitting them. Non-engineered buildings such as unreinforced masonry structures are the most vulnerable types in this region.
New Zealand's Earthquake Commission (EQC) covers the first $100,000 of damage to residential properties and land, and up to $20,000 for damaged contents. Private insurers cover damage beyond that level. Commercial property damage is not covered by the EQC; however, because the earthquake occurred in a sparsely populated area of New Zealand, the total insured value of commercial and industrial exposure is estimated to be relatively low.
Although today's event had a strike-slip component, it was a primarily a thrust earthquake, suggesting that it might be a subduction-type earthquake, although the dip angle of 38 degrees is larger than the typical subduction zone event.
According to AIR, this earthquake happened in a seismically complex area where the Hikurangi subduction zone is transitioned into Alpine crustal fault through the Marlborough fault system.
AIR will continue to monitor the situation and provide additional information as warranted.
AIR Worldwide, Australasia, Bermuda, Insurance, Reinsurance, Earthquakes, Catastrophe, Property, Casualty, New Zealand's Earthquake Commission