February 8th, 2011eb ua y 8 , 0
RENSURANCE ASSOCIATIONEarthquake Risk: ChileCatastrophe Modeling PerspectiveRENSURANCE ASSOCIATION
OF AMERICA
FEBRUARY , 2011
Catastrophe Modeling Perspective
Francisco J. Perez, Ph.D.
www.guycarp.com
,Head of Portfolio [email protected]
Agenda
Overview
(Re)Insurance Market and Regulation( ) g
Seismic Hazard
Earthquake Exposure and Design CodeEarthquake Exposure and Design Code
M8.8 Feb 27 Maule Earthquake
C t t h M d liCatastrophe Modeling
Pacific Northwest: Cascadia Subduction Zone
Conclusions
1Guy Carpenter
CHILE (CHL)Overview
Population 16,746,491 (July 2010)
Area 748,800 sq km (289,111 sq. miles)
Currency Chilean Peso (CLP)
Monetary Unit for Financial UF- Unidad de Fomento = 43.53 USD
Puente Alto
Villa del Mar
o eta y U t o a c aTransactions
U U dad de o e to 3 53 US(Jan 2011)
Gross Domestic Product $260bn USD (2010)
GDP per Capita $15,500 USD (2010)
GDP Agriculture 5.6%GDP Industry 40 5% Puente Alto
Chilean Econom ( since 1990s)
GDP Industry 40.5%
GDP Services 53.9%
Chilean Economy (~ since 1990s)• Market-oriented economy • High level of foreign trade • Strong financial institutions
Strongest sovereign bond rating in• Strongest sovereign bond rating in South America.
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SOURCE: https://www.cia.gov/library/publications/the-world-factbook/geos/ci.html
Insurance MarketDIRECT WRITTEN PREMIUM (in millions)
Line of Business Currency 2009-10Amount Percent Amount Percent Variation
2009 2010
(as of September, 2010)
Insurance Penetration in bn USD (2007) P&C (Non Life) UF 43 35.8% 48 33.3% 12.1%Life Insurance UF 78 64.2% 97 66.7% 25.0%Insurance Market UF 121 100.0% 146 100.0% 20.4%
P&C (Non Life) USD 1,458 2,133Life Insurance USD 2,618 4,272I M k t USD 4 076 6 404Insurance Market USD 4,076 6,404
REPORTED PROFIT (in millions)
Line of Business Currency 2009-10Amount Percent Amount Percent Variation
2009 2010
(as of September, 2010)
P&C (Non Life) UF .58 3.6% .24 1.4% -57.9%Life Insurance UF 15.26 96.4% 17.56 98.6% 15.1%Insurance Market UF 15.83 100.0% 17.80 100.0% 12.4%
P&C (Non Life) USD 19.40 10.65Life Insurance USD 513 97 772 07
Chilean Insurance Market is (2010):
Life Insurance USD 513.97 772.07Insurance Market USD 533.37 782.72
DISASTER LOSSES (in millions)
Line of Business Currency 2009-102009 2010
(as of September, 2010)
• P&C (Non-Life): $ 2.1bn USD• Life: $ 4.3bn USD
Amount Percent Amount Percent Variation
P&C (Non Life) UF 20.22 21.1% 184.78 67.6% 814.0%Life Insurance UF 75.37 78.9% 88.60 32.4% 17.5%Insurance Market UF 95.59 100.0% 273.38 100.0% 186.0%
P&C (Non Life) USD 681.12 8,126.64 380% of
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SOURCES: FALSECOLDA, RMS, Asociacion de Aseguradores de Chile. ACCH Life Insurance USD 2,539.37 3,896.45Insurance Market USD 3,220.49 12,023.09
SVS: Superintendencia de Valores y Seguros
380% of P&C DWP
Santander R t
P&C INSURANCE MARKETInsurance MarketP&C Gross Premium Distribution (as of March, 2010)
Cardif7,9%
Liberty8,2%
Consorcio Nac.2,0%
ACE4,3%
Santander5,1%
Chartis6,6%
Magallanes7,2%
Continental Crédito1,2%
HDI1,4%
Renta1,5%
• Premium rates for earthquake cover have increased by an average of 14% since the event
• This can be explained by a much more selective local market, emphasizing quality data, loss records, and deductible levels
• Insurers are especially selective in their appetite
Other6,6%
Chilena8,3% |
Cesce
Mapfre Garantía0,5%
Coface0,6%
Chubb1,0%
• Insurers are especially selective in their appetite for machinery breakdown and contingent business interruption exposures
• Many insurers are watching their accumulations in high-risk areas very carefully, which could influence supply and demand aspects for capacity and pricing
BCI8,6%
Mapfre 8,8%
RSA14,0%
Penta%
Orión0,1%
Mut. Carabineros0,1%
Cesce0,1%
Huelén0,0%ZenitSantander
5%
Chilena (Zurich)11%
capacity and pricing
PROPERTY INSURANCE MARKET(as of March, 2010)
12,4% 0,0%FAF0,0%
Chartis (AIG)12%
Liberty12%
Other5% Chubb
0 4%
ACE4%
BCI5%
5%
Consorcio Nac.1,4%
Magallanes2,6%
GROSS PREMIUM $1,732m USD
• The Chilean insurance market has experienced a significant consolidation of insurers, challenging a competitively priced
RSA19%
Mapfre15%
Penta13%
Renta0,4%
HDI0,4%
M. Carabineros0,3%
0,4%
GROSS PREMIUM $506m USD
, g g p y pmarketplace.
• These changes are also affecting the attention paid to solvency margins of insurers. The insurance superintendent is monitoring this.
• Deductible levels remain low except for machinery breakdown, earthquake, and business interruption coverage
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GROSS PREMIUM $506m USD
~30% of P&CSVS: Superintendencia de Valores y Seguros; Guy Carpenter; Marsh
Chilena (Zurich)S t d
Insurance MarketP&C Net Retained Premium Distribution(September, 2009)
P&C INSURANCE MARKET(as of March, 2010)
Penta9%
Magallanes9%
HDI
Renta2,2%
Chartis (AIG)3%
Chilena (Zurich)3%
Consorcio Nac.3%
Santander4%
Mapfre6%
( p )
• The financial services regulator, the SVS will make changes to insurance contract law: property insurances and life and health insurances
Liberty10%
ACE3%
Other6%
M f G
Continental0,5%
Coface0,6%
HDI2,0%
• The Insurance Companies' Association (AACH) has announced its intention of submitting to the SVS a new uniform earthquake policy for registration
RSA16%
Cardif14%
BCI14%
Mapfre Gar.0,2%
Chubb0,2%
Mutual Carab.0,1%Huelén
0,0%ACEMagallanes
Santander4%
Penta7%Mapfre
10%
PROPERTY INSURANCE MARKET(as of March, 2010)
NET RETAINED PREMIUM $813m USD (47% of Gross)
Chilena (Zurich)12%
BCI12%
Other
HDI1,0%
ACE2,4%
Consorcio Nac.2,1%
Magallanes3%
• Banks are continuing to increase dramatically their share of the non life insurance market to the detriment in
RSA
Liberty18%
Other8%
Chubb0 2%
Renta0,6%
Mutual Carab.0,6%
Chartis (AIG)0,8%
of the non-life insurance market, to the detriment in particular of the traditional agent and broker channels
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26% 0,2%
Cardif0,1%NET RETAINED PREMIUM $154m USD (30%) of Gross SVS: Superintendencia de Valores y Seguros
Insurance MarketResidential Insured Exposure
• Mass marketing of personal lines covers through banks and department stores has stimulated demando It is estimated that 100% of property policieso It is estimated that 100% of property policies
covering loans carry earthquake covero About 25% of private homeowners have
coverage• Fire following is covered under the
• The basic fire policy covers:o fireo lightning o domestic explosion
gearthquake extension
• A deductible of 1% of the insured values
o domestic explosion
• Earthquake, fire following earthquake, Windstorm and Flood are not covered as part of the standard fire policy but under the extended coverage clause
• The rate for flood coverage may be quoted as 5% of the fire rate
• Deductibles are not usually applied to flood fire policy but under the extended coverage clause
• Separate earthquake policies are not normally issued but it may be done infrequently as part of an international program or if excess layer cover is
educ b es a e o usua y app ed o oodrisk
• the pre-2010 earthquake rate of about 0.80‰ to 1.20‰ was barely sufficient to
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e a o a p og a o e cess aye co e srequired pay for the reinsurance cost
Insurance MarketCommercial/Industrial Insured Exposure
• Industrial all risk policies are available, but usually only for major insureds
• Commercial and industrial risks are usually covered on an all-risk basis
• Extended coverage includes windstorm boiler B i I t ti• Extended coverage includes windstorm, boiler explosion, explosion of gas, falling aircraft, vehicle impact, earthquake, flood and Strike-Riot and Civil Commotion (SRCC)
Business Interruption
• A standard Chilean form is widely used
• The American gross earnings form is• The risks of hail, vandalism, malicious damage, sonic boom, sprinkler leakage and other water damage can be covered by endorsement
• A deductible of 2% of the sum insured applies to
• The American gross earnings form is sometimes used
• The normal maximum indemnity period is six months for medium size A deductible of 2% of the sum insured applies to
commercial and industrial risks, subject to a minimum of UF 50 (USD 2,088) and a maximum of UF 10,000 (USD 417,600) though the concept of a maximum is disappearing
companies
• Deductible of 48/72 hours, although significantly higher deductibles are required for the major energy, mining,
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required for the major energy, mining, etc. exposures.
Reinsurance MarketReinsurance Participation
• Reinsurers are insisting on a minimum average rate for earthquake of 1.8‰, about 50% of the maximum rate previously charged in the market
• The two key renewal dates influencing rate cycles in this region are January and July; the dates in which local insurers renew their reinsurance treaties.
• Reinsurance rates for Chile have increased, with catastrophe rates up by as much as 80%
• Local reinsurance companies are required a minimum capital of 5m USD for each life and non-life
• Mapre Re and Partner have local reinsurance offices in Santiago
• While the proportional contracts are placed directly with
XOL CONTRACTS
Reinsurance Company Percent Participation RatingQUOTA-SHARE CONTRACTS
p y
• CAT rates continue to challenge insurers, which affects pricing levels for buyers in heavily exposed earthquake regions.
reinsurance companies, the XOL programs are placed through brokers .
Munich Re 31.4% AA-Swiss Re 10.8% AAce Tempest Re 8.9% A+Mapfre Re 8.7% AALloyd's 8.4% A+Hannover 5.4% AQBE 3 1% A
Reinsurance Company Percent Participation Rating
Royal & Sunalliance 18.0% ASwiss Re 11.5% AZurich 10.5% AMunich Re 9.6% AA-M f R 8 1% AA QBE 3.1% A
Everest Re 2.7% A+Liberty Mutual Insurance 2.6% A+Validus 2.5% ASirius 2.4% APartner Re 2.0% A+White Mountain 1.3% A-Allianz 1 1% AA
Mapfre Re 8.1% AALloyd's 6.3% A+Everest 5.8% A+Stein Insurance Company 4.3% AAllianz 3.2% AA-XL Re 3.1% ANew Hampshire 2.6% A+
Allianz 1.1% AA-Aspen Re 1.0% A+New Hampshire 0.9% A+Axis Reinsurance Company 0.9% A+Federal Insurance 0.8% AAHouston Casualty Insurance Company 0.5% AAAllied World Assurance Company UK 0.4% A-Oth R i C i (27) 4 2%
Partner Re 2.1% AScor 1.5% A-R + V Versicherung AG 1.4% AHannover 1.3% ALiberty Mutual Insurance 1.3% A+Odyssey Re 1.2% AParis Re 1.0% A+
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Other Reinsurance Companies (27) 4.2%
SVS: Superintendencia de Valores y Seguros
Federal Insurance 0.9% AATransatlantic Re 0.9% A+Other Reinsurance Companies (66) 5.4%
Regulation and SolvencyEarthquake Insurance Reserve SVS: Superintendencia de Valores y Seguros
• IFRS (International Financial Reporting Standards) reporting will be introduced in parallel with current norms from first quarter 2012 and independently from first quarter 2013
• The Chilean Securities and Insurance Commission (SVS) requires that Direct and Reinsurance Non-Life Companies set up the earthquake technical reserves
• Premium equalization reserves must be set up to meet obligations for risks whose level of potential disaster is unknown, or varies irregularly, is cyclical or catastrophic (rules for establishing the reserve are set by the SVS)
• The characteristics of the Earthquake Reserve are:o It is based on the actual exposure of the in-force contracts and business
structureo It is not a long term aggregated reserve. Once the exposures expire, the
reserve is released
There is no catastrophe f nd for earthq ake risks
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• There is no catastrophe fund for earthquake risks
Regulation and SolvencyEarthquake Insurance Reserve (Circular N1126)
Earthquake Catastrophe Reserve
(Current exposure up to the reserve calculation date)
5 ZONES
RCT = [ P + MAX { (PML * MTE - CXL), 0} ] * 1.10
where:
RCT Earthquake Catastrophe ReserveRCT Earthquake Catastrophe Reserve
P Retention
PML 10% Building and Contents
15% Other Risks (BI and Engineering)
MTE Total Exposure (largest accumulation zone )
PML P b bl M i LPML Probable Maximum Loss
CXL XOL Reinsurance Contract
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SOURCE: Regulation to Establish Insurance Reserves (circular N 1126)SVS: Superintendencia de Valores y Seguros (The Chilean Securities and Insurance Commission)
Political and Administrative DivisionZones, Regions, Provinces and Comunas
States Counties
ZONE REGION (STATE) REGION ID REGION NAME
1XV 15 ARICA AND PARINACOTA
1 I 1 TARAPCA
15 REGIONS 51 PROVINCES 342 COMUNAS5 ZONES
1 I 1 TARAPCA1 II 2 ANTOFAGASTA1 III 3 ATACAMA1 IV 4 C0QUIMBO2 V 5 VALPARAISO3 XIII 13 METROPOLITANA44 VI 6 O'HIGGINS4 VI 6 O'HIGGINS4 VII 7 MAULE4 VII 7 MAULE4 VII 7 MAULE4 VII 7 MAULE4 VIII 8 BIOBIO4 VIII 8 BIOBIO4 VIII 8 BIOBIO4 VIII 8 BIOBIO4 VIII 8 BIOBIO55 IX 9 ARAUCANIA5 IX 9 ARAUCANIA5 XIV 14 LOS RIOS5 X 10 LOS LAGOS5 X 10 LOS LAGOS5 X 10 LOS LAGOS5 X 10 LOS LAGOS5 X 10 LOS LAGOS5 XI 11 AISEN5 XII 12 MAGALLANES Y ANTARTICA5 XII 12 MAGALLANES Y ANTARTICA5 XII 12 MAGALLANES Y ANTARTICA6 FLOTANTES
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Comuna of Santiago (County)
Political and Administrative DivisionRegions, Provinces and Comunas
REGION (STATE) REGION ID REGION NAME PROVINCES COMUNAS
(COUNTIES)
PROVINCE OF SANTIAGO
XV 15 ARICA AND PARINACOTA 2 4I 1 TARAPCA 2 7II 2 ANTOFAGASTA 3 9III 3 ATACAMA 3 9IV 4 C0QUIMBO 3 15V 5 VALPARAISO 7 38
XIII 13 METROPOLITANA 6 52
VI 6 O'HIGGINS 3 33VI 6 O'HIGGINSVII 7 MAULE 4 30VII 7 MAULEVII 7 MAULEVII 7 MAULEVIII 8 BIOBIO 4 54VIII 8 BIOBIOVIII 8 BIOBIOVIII 8 BIOBIO
IX 9 ARAUCANIA 2 32IX 9 ARAUCANIA
XIV 14 LOS RIOS 2 12X 10 LOS LAGOS 4 30X 10 LOS LAGOSX 10 LOS LAGOSX 10 LOS LAGOS
METROPOLITANREGION (State)
X 10 LOS LAGOSXI 11 AISEN 4 10XII 12 MAGALLANES Y ANTARTICA 4 11XII 12 MAGALLANES Y ANTARTICAXII 12 MAGALLANES Y ANTARTICA
FLOTANTES51 342
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Source: 2007 Instituto Nacional de Estadisticas de Chile
Earthquake Hazard: Seismic IntensityExposure Accumulation ZonesCRESTA and Sub CRESTA Zones Seismic Intensity Map –PGA
10 % Exceedance in 50 years
CRESTA ID CRESTA NAME RMS v10.0 EQE v3.13 AIR v12.0
CHL 1 Norte 1 CHL 001 000 Z1 0CHL.1 Norte 1 CHL-001-000 Z1.0
CHL.1.1 Tarapacá 1.1 CHL-001-001 Z1.1CHL.1.2 Antofagasta 1.2 CHL-001-002 Z1.2CHL.1.3 Atacama 1.3 CHL-001-003 Z1.3CHL.1.4 Coquimbo 1.4 CHL-001-004 Z1.4CHL.2 Valparaíso/Aconcagua 2 CHL-002-000 Z2.0CHL 3 Santiago 3 CHL 003 000 Z3 0CHL.3 Santiago 3 CHL-003-000 Z3.0CHL.4 Centrales 4 CHL-004-000 Z4.0CHL.4.1 O’Higgins 4.1 CHL-004-001 Z4. 1CHL.4.2 Colchagua 4.2 CHL-004-002 Z4. 2CHL.4.3 Curicó 4.3 CHL-004-003 Z4. 3CHL.4.4 Talca 4.4 CHL-004-004 Z4. 4CHL.4.5 Maule 4.5 CHL-004-005 Z4. 5CHL 4 6 Linares 4 6 CHL-004-006 Z4 6CHL.4.6 Linares 4.6 CHL-004-006 Z4. 6CHL.4.7 Nuble 4.7 CHL-004-007 Z4. 7CHL.4.8 Concepción 4.8 CHL-004-008 Z4. 8CHL.4.9 Bio-Bio 4.9 CHL-004-009 Z4. 9CHL.4.10 Arauco 4.10 CHL-004-010 Z4.10CHL.5 Australes 5 CHL-005-000 Z5.0CHL.5.1 Malleco 5.1 CHL-005-001 Z5. 1CHL 5 2 Cautín 5 2 CHL-005-002 Z5 2CHL.5.2 Cautín 5.2 CHL 005 002 Z5. 2
CHL.5.3 Valdivia 5.3 CHL-005-003 Z5. 3CHL.5.4 Osorno 5.4 CHL-005-004 Z5. 4CHL.5.5 Llanquihue 5.5 CHL-005-005 Z5. 5CHL.5.6 Chiloé 5.6 CHL-005-006 Z5. 6CHL.5.7 Aisén 5.7 CHL-005-007 Z5. 7CHL 5 8 Magallanes 5 8 CHL-005-008 Z5 8
2
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m/s2
CHL.5.8 Magallanes 5.8 CHL 005 008 Z5. 8CHL.5.9 Tierra del Fuego 5.9 CHL-005-009 Z5. 9CHL.5.10 Antárctica Chilena 5.10 CHL-005-010 Z5.10
Flotantes Z6
Earthquake HazardSubduction Zone and Seismic Sources 1
Thrust
Seismic Source Source Type Max. Magnitude
Nazca Plate,
9cm/year
1 Active Faults Crustal 7.0
2 Subduction Zone Interface 8.5
3 Intermediate to Deep Events Intraslab 8.0y
Southamerican PlateC
Antartic Plate
Scotia Plate
A
B
2 (50-60 km)
3 (60-200 km)
Seismic slip
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Seismicity Map – 1990 - 2006
Mega thrust Earthquakes
Historical Mega-EarthquakesGlobal Earthquake with M>=8 since 1900
TOP 10 LARGEST EARTHQUAKES SINCE 1900
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Source: National Earthquake Information Center
Largest Earthquakes in ChileRupture Lengths since 1500
Year Time Magnitude Earthquake Fatalities
1730 7:08 M8.7 Valparasio na1835 2:20 M8.2 Concepcion 500
Time
A i G835 : 0 M8.2 Concepcion 500
1868 8:13 M9.0 Arica, Peru (now Chile) 25,000 1877 5:10 M8.3 Offshore Tarapaca 34 1906 8:17 M8.2 Valparaiso 3,882 1922 11:11 M8.5 Chile Argentina Border na1928 12:01 M7.6 Talca 225 1939 1:25 M7.8 Chillan 28,000 1943 4 06 M8 2 Ill l S l 25
Arica Gap
1943 4:06 M8.2 Illapel Salamanca 25 1960 5:21 M7.9 Arauco Peninsula na1960 5:22 M9.5 Chile 1,655 1965 2:23 M7.0 Taltal 1 1965 3:28 M7.4 La Ligua 400 1971 7:09 M7.5 Valparaiso region 90 1985 3:03 M7.8 offshore Valparaiso 177 Le
ngth
: 500
km
1998 1:30 M7.1 Near Coast of Northern na2002 6:18 M6.6 Chile Argentina Border Region na2003 6:20 M6.8 Near the Coast of Central Chile na2004 5:03 M6.6 Bio Bio, Chile na2005 6:13 M7.8 Tarapaca 11 2007 11:14 M7.7 Antofagasta 2 2007 12:16 M6 7 Antofagasta na
Rup
ture
2007 12:16 M6.7 Antofagasta na2008 2:04 M6.3 Tarapaca na2009 11:13 M6.5 Offshore Tarapaca na2010 2:27 M8.8 Offshore Bio Bio 577 SEISMIC GAP
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Rupture lengths of large earthquake in Chile
Rupture zone of most recent events
Quaternary Volcanoes
Earthquake HazardRecurrence Rates
EARTHQUAKE DENSITY MAP
Average Number of Earthquakes per year
Magnitude 5 and greaterAnnual Event FrequencyChilean Catalog Martin (1906 -1985)
Magnitude [Ms] Chile Santiago Region> 8.00 0.08 0.06
Magnitude 5 and greater
7.50 - 8.00 0.35 0.347.00 - 7.50 0.95 0.956.50 - 7.00 2.60 1.826.00 - 6.50 6.95 3.335.50 - 6.00 18.70 7.305.00 - 5.50 51.40 22.00
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Source: Kate Stillwell of EQECAT; USGS
Regional Earthquake ExposureHousing and Population Density
Population DensityPopulation Density
Region Region Name HOUSES URBANA RURAL Percent
COUNTRY 4,399,952 3,739,148 660,804 100.00%XV De ARICA 52,396 47,339 5,057 1.19%I Tarapaca 71,326 64,395 6,931 1.62%II Antofagasta 126,882 122,086 4,796 2.88%III Atacama 79,012 70,190 8,822 1.80%IV Coquimbo 192,587 143,885 48,702 4.38%V Valparaiso 532,641 489,120 43,521 12.11%
XIII Region Metropolitana 1,643,892 1,589,636 54,256 37.36%VI O'Higgins 232,930 162,545 70,385 5.29%VII Maule 278,192 181,067 97,125 6.32%VIII Bio-Bio 531,385 424,615 106,770 12.08%IX Araucania 259 939 170 577 89 362 5 91%
Region Region Name Population POPULATION URBANA RURAL Percent
IX Araucania 259,939 170,577 89,362 5.91%X Los Lagos 212,550 138,566 73,984 4.83%XI Aisen 30,012 21,594 8,418 0.68%XII Magallanes 48,335 43,090 5,245 1.10%XIV Los Rios 107,873 70,443 37,430 2.45%
Region Region Name Density POPULATION URBANA RURAL Percent
COUNTRY 5.9 15,741,682 13,507,546 2,234,136 100.00%XV De ARICA 11.2 189,644 176,676 12,968 1.20%I Tarapaca 5.7 238,950 226,462 12,488 1.52%II Antofagasta 3.9 493,984 482,546 11,438 3.14%III Atacama 0.3 254,336 232,619 21,717 1.62%IV Coquimbo 14.9 603,210 470,922 132,288 3.83%V Valparaiso 93.9 1,539,852 1,409,902 129,950 9.78%
XIII Region Metropolitana 393.5 6,061,185 5,875,013 186,172 38.50%VI O'Higgins 47.6 780,627 548,584 232,043 4.96%VII Maule 30.0 908,097 603,020 305,077 5.77%VIII Bio-Bio 50.2 1,861,562 1,528,306 333,256 11.83%IX Araucania 27.3 869,535 588,408 281,127 5.52%X Los Lagos 14.8 716,739 491,040 225,699 4.55%
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XI Aisen 6.6 716,739 491,040 225,699 4.55%XII Magallanes 0.1 150,826 139,669 11,157 0.96%XIV Los Rios 19.3 356,396 243,339 113,057 2.26%
SANTIAGO CONCEPCION VINA DEL MAREarthquake ExposureMajor Cities
IXVCITIES
Principal Cities
III
II
VIXIII
V
IV
Principal Agglomerations
XI
X
IX
VIII
VII
XIV
XII
REGIONS
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(1992) (2002) Instituto Nacional de Estadísticas (web).
Ground Motion Soil Site Amplification
SOIL FACTORS (NEHRP CLASSIFICATION)
• the ROCK units have a less pronounced amplitude dependency
• The amplification for the soil sites decreases with increasing ground-motion
SOILS CLASSIFICATION: SANTIAGO BASIN (XIII)HAZARD INTENSITY ON SOIL A Hard Rock
B Rock
g glevels
C Very dense soil/Soft
rock
BC Gravel/Sandy Gravel
CD Sandy Silt/Sandy Clay
BC
CD
B
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Exposure CharacteristicsConstruction, Year Built and Number of Stories
• The Chilean Building Code is one of the most stringent in the world
• The effectiveness of the Code enforcement isThe effectiveness of the Code enforcement is reflected by the limited number of new buildings collapsed during extremely large earthquakes
• The capital of Santiago has a large number of residential and commercial high-rise buildings ~ more then 2000
DISTRIBUTION OF BUILDING CONSTRUCTION
Line of busines Wood Reinforced Masonry
Reinforced Concrete Steel
Residential 11% 81% 8% 0%C i l 3% 47% 49% 1%
EXPOSURE DISTRIBUTION BY YEAR BUILT
Year Built Residential Multi-family Commercial Industrial
more then 2000
• Construction outside of urban areas is less robust
• Decree 369 of the Ministry of Economy mandates portable fire extinguishers in industries, banks, stores, supermarkets, and customer service offices
Commercial 3% 47% 49% 1%Industrial 0% 13% 38% 49%
Pre 1950 36.0% 36.0% 36.0% 30.0%1950 - 1972 21.0% 21.0% 21.0% 40.0%1973 - 1993 12.0% 11.5% 11.0% 20.0%Post 1993 31.0% 31.5% 32.0% 10.0%
• A department of the Fire Brigade Super-Intendency inspects fire prevention systems in buildings
• Fire hydrants are installed in many parts of Santiago and other major cities
• Smoke detectors exist in many office buildings and hotels
• Sprinkler systems are increasingly installed in industrial and commercial facilities
DISTRIBUTION OF NUMBER OF STORIES
Line of busines 1-3 Stories 4-7 stories 8-14 stories 15+
Residential 100% 0% 0% 0%Commercial 48% 37% 12% 3%
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Industrial 97% 3% 0% 0%
Chilean Building Design CodeSeismic Zones (NCh433-1996; -2003)
Chile Official Buildingcode first approved in
19351935Modified in:1949, 1972, 1989, and
1996, 2003
Design Spectrum: RM Hospital Sotero del Rio Station
LIFE SAFETY
10% Probability of
2
3
ybeing exceeded in 50 years
13
Seismic Zone Effective PGA (g's)Low 1 0.20 gMod 2 0.30 gHigh 3 0 40 g
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High 3 0.40 g
Source: Official Chilean Code NCh433.Of96; John Wallace June 2010
Comuna Zone Comuna ZoneAntuco 2 Niquen 2Arauco 3 Pemuco 2
VIII – Bio-Bio Region
SantiagoBuilding CodeDesign Seismic Zones
Bulnes 3 Penco 3Cabrero 3 Pinto 2Canete 3 Portezuelo 3Chillan 3 Quilaco 2Cobquecura 3 Quilleco 2Coelemu 3 Quillon 3Coihueco 2 Quirihue 3
3 2
1
Valparaiso
Comuna Zone Comuna ZoneAlhue 3 Maipu 2Buin 2 Maria Pinto 3Calera de Tango 2 Melipilla 3
Coihueco 2 Quirihue 3Concepcion 3 Ranquil 3Contulmo 3 San Carlos 3Coronel 3 San Fabian 2Cualqui 3 San Ignacio 2Curanilahue 3 San Nicolas 3El Carmen 2 San Rosendo 3
XIII - Santiago Metropolitan Region
1
Calera de Tango 2 Melipilla 3Cerrillos 2 Nunoa 2Cerro Navia 2 Paine 2Colina 2 Pedro Aguirre Cerda 2Conchali 2 Penaflor 2Curacavi 3 Penalolen 2El Bosque 2 Pirque 2
Florida 3 Santa Barba 2Laja 3 Santa Juana 3Los Alamos 3 Talcahuano 3Los Angeles 2 Tirua 3Lota 3 Tome 3Mulchen 2 Treguaco 3Nacimiento 3 Tucapel 2El Monte 3 Providencia 2
Estacion Central 2 Pudahuel 2Huechuraba 2 Puente Alto 2Independencia 2 Quilicura 2Isla de Maipo 2 Quinta Normal 2La Cisterna 2 Recolecta 2La Florida 2 Renca 2
Nacimiento 3 Tucapel 2Nebu 3 Yumbel 3Negrete 3 Yungay 2Ninhue 3
23La Granja 2 San Bernardo 2La Pintana 2 San Joaquin 2La Reyna 2 San Jose de Maipo 2Lampa 3 San Miguel 2Las Condes 2 San Pedro 3Lo Barnechea 2 San Ramon 2Lo Espejo 2 Santiago 2
1Concepcion
23Guy Carpenter
Lo Espejo 2 Santiago 2Lo Prado 2 Talagante 2Macul 2 Tiltil 3
Vitacura 2 Source: Official Chilean Code NCh433.Of96
M8.8 Feb27, 2010 Maule EarthquakeLosses by Sector
M8.8 Feb 27, 2010 Earthquake losses ( in millions of USD as March 2010 )
Sector Public Sector Private Sector Total PercentSector Public Sector Private Sector Total PercentHousing 3,258 685 3,943 13.3%Education 1,536 1,479 3,015 10.2%Health 2,720 - 2,720 9.2%Energy 1,601 1,601 5.4%P bli W k 1 458 1 458 4 9%Public Works 1,458 - 1,458 4.9%Agriculture 9 592 601 2.0%Transportation 523 523 1.8%Infrastructure Other 267 - 267 0.9%Municipalities 96 - 96 0.3%Other (Industry, Fishery and Commerce) 1,238 5,477 6,715 22.6%Total Damage 10,582 10,357 20,939 70.6%
Minor Economic Growth 7,606 25.6%Debris Removal and Other Costs 1,117 3.8%,Total Cost 10,582 10,357 29,662 100.0%
Insured Losses -1,252 3,669- -4,921 16.6%Net Cost 9,330 6,688 24,741
24Guy Carpenter
Source : www.svs.cl (webpage of Chilean Superintendence)Pictures extracted from RMS event Inspection presentation
~6.8 bn USD Insured losses
~30 bn USD Total (September 2010)
M8.8 Feb27, 2010 Maule Earthquake(Re) Insured Losses
Earthquake Insured Losses: $6,759 m USD M8 Feb 27 2010 Maule EQ
(as of September 2010)
Chartis12.1%
Chilena (Zurich)10.7%
Penta7.1%
BCI3.4%
Magallanes2.8%
Santander2.4%
Chubb1.5%
(as of September 2010)ECONOMICAL LOSSES: TOP TEN NATURAL DISASTERS IN CHILE
Disaster Date Damage (million USD)
Earthquake (seismic activity) February 27, 2010 30,000Earthquake (seismic activity) March 3, 1985 1,500Earthquake (seismic activity) January 24,1939 920Earthquake (seismic activity) May 21, 1960 550
Mapfre
Liberty13.0%
ACE1.1%
Consorcio0.8%
Renta0.5%
HDI0.3%
Other4.2%
PRE-TAX NET LOSS ESTIMATES FOR THE CHILEAN EARTHQUAKE AND WINDSTORM XYNTHIA (March 2010)
Earthquake (seismic activity) May 21, 1960 550Earthquake (seismic activity) June 5, 1953 500Wildfire February 1, 1999 280Earthquake (seismic activity) August 7, 1971 236Earthquake (seismic activity) March 1, 1963 235Flood May 22, 2002 200Drought January 1, 1991 200
RSA28.8%
Mapfre15.6% Other
0.02%
PRE-TAX NET LOSS ESTIMATES FOR THE CHILEAN EARTHQUAKE AND WINDSTORM XYNTHIA (March 2010)(in millions of UDS)
COMPANYMoody' Insurance Financial Strength
Rating
Best Estimate
4Q-2009 Shareholders'
Equity
Percent of 4Q-2009 Equity
Munich Reinsurance Company [3][4] Aa3 STA 681 32,056 2.10%
Swiss Reinsurance Company [5] A1 STA 600 25,247 2.40%
• Accumulations are kept on the basis of the C t
PartnerRe Ltd. Aa3 STA 325 7,646 4.30%Everest Re Group, Ltd. [6] Aa3 STA 313 6,102 5.10%Hannover Re [4] NR 306 6,121 5.00%Validus Holdings, Ltd. A3 STA 245 4,031 6.10%SCOR [4][7] A2 STA 214 5,613 3.80%XL Capital Ltd A2 STA 195 9,430 2.10%Hiscox Ltd [8] NR 149 1,818 8.20%
Cresta zones
• reinsurers report that the insurance companies were able to provide the detailed information following the 2010 earthquake
AXIS Capital Holdings Limited A2 STA 108 5,500 2.00%Transatlantic Holdings, Inc. [9] A1 STA 94 4,034 2.30%Montpelier Re Holdings Ltd. NR 93 1,729 5.30%Platinum Underwriters Holdings, Ltd. [10] NR 89 2,078 4.30%
Endurance Specialty Holdings Ltd. A2 STA 65 2,787 2.30%
Flagstone Reinsurance Holdings Limited A3 STA 55 1,211 4.50%Max Capital Group Ltd. A3 STA 15 1,565 1.00%
25Guy Carpenter
Source : www.svs.cl (webpage of Chilean Superintendence)
3,547 116,968 3.00%
Costliest World EarthquakesAs of March 29, 2010 • Insured losses from large
catastrophes typically are around 5%
in millions USD
of the Direct Market premiums
• The losses from the M8.8 Feb 27, 2010 Earthquake correspond to the accumulated premium from 2007 to
5th Costliest Earthquake Event
2009
• About one third of the total losses will be paid by the Insurance Industry 7 to 8 bn of USD
350.0%330.0%
Event Insured Losses Percent of Direct Premium (Non Life)
0.0%50.0%
100.0%150.0%200.0%250.0%300.0%
11.4% 5.9% 2.2% 1.5% 4.4%
26Guy Carpenter
Source: Insurance Information Institute; Munich Re Source: AACH – Jorge Claude
M8.8 Feb27, 2010 Maule EarthquakeRegional Impact – Hazard Intensity
(1) February 27 2010 M8.8 Offshore Maule
DIRECT SHAKING
Disaster Date No Total AffectedEarthquake (seismic activity) February 27, 2010 2,671,556 Earthquake (seismic activity) March 3, 1985 2,348,973 E th k ( i i ti it ) J 24 1939 2 003 000
POPULATION AFFECTED BY THE EARTHQUAKE Fatalities: 577
Earthquake (seismic activity) January 24,1939 2,003,000 Earthquake (seismic activity) May 21, 1960 1,482,275 Flood June 5, 1953 375,000 Storm February 1, 1999 242,345 Flood August 7, 1971 221,842 Flood March 1, 1963 139,667 Drought May 22, 2002 120,000 Fl d J 1 1991 116 364Flood January 1, 1991 116,364
REGION
REGION AFFECTED BY THE EARTHQUAKE
ZONE REGION (STATE) REGION NAME PROVINCES MAIN CITIES
1 IV COQUIMBO Elqui, Limari, Choapa La Serena, Coquimbo
2 V VALPARAISO Vina del Mar, Valparaiso, San Antonio, Petorca, Los Andes, Quillota, Isla de Pascua Valparaiso, Vina del Mar
3 XIII METROPOLITANASantiago, Cordillera, malpilla, Talagante, Maipo, Chacabuco Santiago
VI O'HIGGINS Cacahapoal, Colchagua, Cardenal Caro Rancagua
VII MAULE Curico, Talca, Linares, Cauquenes Curico, Talca, maule
VIII BIOBIO Nuble, Bio Bio, Concepcion, Arauco Concepcion, Talcahuano, Arauco, Chillan
4
27Guy Carpenter
Source:"EM-DAT: The OFDA/CRED International Disaster Database, www.emdat.be - Université catholique de Louvain - Brussels - Belgium"
M8.8 Feb27, 2010 Maule EarthquakeHazard Intensity and aftershocks
Magnitude: 8.8
Time: 3.34 am
Depth; 35 km
Duration: 90 secsDuration: 90 secs
Rupture Lengh: 500 km
Max Slip: 12 meters
Average Slip: 6 meters
Max PGA: 0 65 g at(1) February 27 2010 M8.8
Offshore Maule
Max PGA: 0.65 g at Concepcion
Ground Uplift: 2m in Arauco
1
(3) January 2011 M7.1 Araucania
(2) March 2010 M6.9 Libertador O’Higgins
28Guy Carpenter
M8.8 Feb27, 2010 Maule EarthquakeMaximum Tsunami Amplitude in cm (24hr wave propagation)
TsunamiSudden Uplift
M8.8 Maule, 2010 M9.4 Valdivia, 1960
JAPAN
M8.8 Maule, 2010• A tsunami travels slow in shallow
water and fast in deep water:
o In 1000 m of water would
3 hrs
M9.4 Valdivia, 1960
2 h
3 hrs
travel at 350 km/hour
o In 4500 m of water would travel at 760 km/hour
o In 6000 m of water would travel at 870km/hour
1 hr
2 hrs
1 hr
2 hr• The tsunami produced wave heights of:
o 2.61 m at Valparaiso
o 1.81 m at Talcahuano
o 1.17 m at Gisborne (Newo 1.17 m at Gisborne (New Zealand)
o 0.95 m at Hanasaki (Japan)
o 0.91 m at Santa Barbara (California)
JAPAN
o 0.65 m at Acapulco (Mexico)
o 0.36 m at Kodiak (Alaska)
o 0.26 m at Honolulu, and small waves were
29Guy Carpenter
SOURCE: NOAA Tsunami Center
JAPAN
M9.4 Valdivia, 1960observed on Lake Pontchartrain in Louisiana in the
M8.8 Feb27, 2010 Maule EarthquakeTsunami Effects: Talcahuano
Talcahuano
COASTAL HOUSING
Concepcion
Talcahuano
COASTAL HOUSING
T l h
30Guy Carpenter
Talcahuano
M8.8 Feb27, 2010 EarthquakeHousing Damage
ADOBE HOUSING
Housing Damage Classification (Units as of March 2010)
CONDOMINIUMS
Type Destroyed Major Damage Minor Damage Total PercentCostal Housing 7,931 8,607 15,384 31,922 8.6%Adobe Urban 26,038 28,153 14,869 69,060 18.7%Adobe Rural 24,538 19,783 22,052 66,373 17.9%Condominiums SERVIU 5,489 15,015 50,955 71,459 19.3%Condominiums Private 17,449 37,356 76,433 131,238 35.5%TOTALES 81,445 108,914 179,693 370,052 100.0%
HOUSING INSURANCE EXPOSURE M8.8 Feb27, 2010 Earthquake
Units % Total Units % Book Units % Book
M t 901 098 23% 901 098 100% 862 980 96%
FIRE INSURANCETOTAL EXPOSURE FIRE + EARTHQUAKEPortfolio
Mortgage 901,098 23% 901,098 100% 862,980 96%Others 3,098,902 77% 523,711 17% 101,080 3%
Total 4,000,000 100% 1,424,809 36% 964,060 24%
31Guy Carpenter
SOURCE: http://siit2.bcn.cl/actualidad-territorial/terremoto_chile/document_view2
M8.8 Feb27, 2010 Maule EarthquakeConfined Masonry Buildings
Housing construction:
Low-rise single family dwellings (up to two-storey high)
32Guy Carpenter
Low-rise single family dwellings (up to two-storey high)
medium-rise apartment buildings (three- to four-storey high)
M8.8 Feb27, 2010 EarthquakeMid and High rise Buildings Damage
Buildings in Santiago / Valparaiso constructed from 1985 to 2009*:
• 10,000 three stories or more,
• 2,000 of those are nine stories or more
• 4 collapses
• 50 damaged “beyond repair”
• 0.5% of total, 2.8% of high-rise
Buildings Damaged (Units as of March 2010)
City Collapsed Demolished Inhabitable Evacuated Total Concepción 1 7 8Concepción 1 7 8Talca 1 1Santiago 6 13 7 26
1 14 13 7 35
33Guy Carpenter
SOURCE: http://siit2.bcn.cl/actualidad-territorial/terremoto_chile/document
* EQECAT: Kate Stillwell
M8.8 Feb27, 2010 Maule EarthquakeStructural Wall Buildings (Shear Wall)
WALL SHEAR AND AXIAL STRESSES WALL BOUNDARY DETAILING
34Guy Carpenter
SOURCE: John Wallace EERI Presentation
M d li V i P il A l i G di R l i
Catastrophe Modeling
Modeling Version Peril AnalysisFirm Type CRESTA Zone Region Comuna City Coordinates
RMS v10.0 Earthquake Shake Detailed x x x x xRMS v10.0 Earthquake Shake Aggregate x x
EQE v3.13 Earthquake Shake Aggregate/detail x x x xEQE 3 13 Wi d St A t
Geocoding Resolution
EQE v3.13 Wind Storm Aggregate x x x x
AIR v12.0 Earthquake Shake Detailed x x x x xAIR v12.0 Earthquake Shake Aggregate x x
ERN v2.1.5 RS-Chile
The models mainly estimate direct ground shaking but do not include losses from other collateral hazards such as Tsunami or fire following earthquake, or the impact of Loss Amplification (e.g., demand surge)
Geocoding resolution has a direct effect and may be the strongest influence on modeled losses (i.e., in many areas, site characteristics and hazard intensities vary dramatically over short distances)
Detailed Models
• Provide the most accurate assessment of catastrophe loss potential
• Rely on detailed information of individual risk characteristics, insurance terms and reinsurance
y , y y )
programs
Aggregate Models
• Rely on estimated average distributions of insurable/insured exposure across the industry
35Guy Carpenter
• Make use of loss profiles for specific peril, region and lines of business developed by using detailed models
• Geography data (i.e., region, CRESTA, sub CRESTA or Region, Comuna, City, and latitude/longitude)
Catastrophe ModelingAggregate versus Detailed Models
DETAILED MODEL
• Replacement values (i.e., building, contents and business interruption)
• Building data (i.e., building construction system, occupancy, number of stories, year of construction)
• Insurance specific terms at coverage
CLIENT DATA
• there is an increased focus on modeling
CAT EXPOSURES
• Insurance specific terms at coverage, location and policy levels (i.e., deductibles, attachment levels, limits, coinsurance)
• Reinsurance Programs (i.e., facultative contracts, surplus share, quota share, working excess catastrophe and
GC
CHILE MASTER
DATABASESGC ANALYTICS
• there is an increased focus on modeling throughout the region
• has become mandatory by many multinational insurers and foreign reinsurers
• local underwriters are now employing working excess, catastrophe, and corporate CAT treaties with assigned inuring priorities, and Stop Loss Treaties)
• Reinsurance Programs attachment levels (i.e., attached at the location, policy, account, or portfolio levels) by the line of business cedant ID and date criteria of
AGGREGATED MODEL
BEST PRACTICES
• Testing and Understanding the Models
p y gthese tools more frequently in determining terms and conditions.
business, cedant ID, and date criteria of the treaty • Industry format data (i.e., UNICED/2,
CRESTA plus formats)
• Industry Exposure Values (i.e., sums insured, number of risks and/or premiums by personal lines, commercial, industrial, auto)
Return Period LossesAggregate versus Detail Model
GEO-Region GEO-Comunaauto)
• Typical Industry Profiles of Insurance Terms of coverage, location and policy levels (i.e., deductibles, limits, coinsurance) are selected for the analysis
• Reinsurance Program (i.e., catastrophe 0 0%
2.0%
4.0%
6.0%
8.0%
10.0%
12.0%
14.0%
Gro
und
Up
Loss
(% T
IV)
36Guy Carpenter36
excess of loss, aggregate excess of loss, quota share, surplus share, and per risk)
0.0%
100 250 500
Return Period (years)
Catastrophe ModelingM8.8 Feb27, 2010 Maule EarthquakeModel Estimated Losses: Portfolio A
0.00
Portfolio Estimated Incurred vs Modeled LossesMw 8.8 Feb 27 2010 EQ
Model Estimated Incurred Client(1) February 27 2010 M8.8
Offshore Maule
0 000.000.000.000.000.000.000.000.00
P f li E i d I d M d l d L
0.000.000.00
10 20 30 40 50 60 70 80 90 100
Gross Insured Losses (mUF)
70%80%90%
100%
Portfolio Estimated Incurred vs Modeled LossesMw 8.8 Feb 27 2010 EQ
Model Estimated Incurred Client
0%10%20%30%40%50%60%70%
37Guy Carpenter
20 40 60 80 100
Gross Insured Losses (mUF)
Catastrophe ModelingM8.8 Feb27, 2010 Maule EarthquakeModel Estimated Losses by Region: Portfolio A
(1) February 27 2010 M8.8 Offshore Maule
y g
120 00%
Portfolio Incurred vs Modeled Losses by Region
M8 Feb 27 2010 EQ
Estimated Incurred Modeled Loss
60.00%
80.00%
100.00%
120.00%
of To
tal I
ncur
red
0.00%
20.00%
40.00%
Santiago Bernardo Maule (VII) Biobio (VIII) Araucania (Others) Country
Perc
ent o
38Guy Carpenter
(XIII) O'higgins (VI)
(IX)
Catastrophe ModelingM8.8 Feb27, 2010 Maule EarthquakeModel Estimated Losses by LOB: Portfolio A
Portfolio Estimated Incurred Losses by Line of Business
Model Estimated Losses by LOB: Portfolio A
Residential 10% 20%
Commercial 40% 50%
Incurred Modeled
Commercial
Office10%
Auto0.0%
by Line of BusinessMw8.8 Feb 27 2010 EQ Office 10% 5%
Industrial 40% 25%
40%
Industrial40%
Office
Portfolio Modeled Losses by Line of Business
M8.8 Feb 27 EQ
Residential10%
CommercialIndustrial
5% Engineering
50%
Residential20%
25%
39Guy Carpenter
20%
Catastrophe ModelingModel Losses: Portfolio A PORTFOLIO
AAL = 3 24 ‰
5%
10%
15%
20%
25%
% o
f TIV
Portfolio Return Period Losses
% of Countrywide TIV % of Santiago Region TIV
AAL = 3.24 ‰
NET RETAINED EXPOSURE
Cresta C t NNet
R t i d % Percent
Portfolio (X,Y) Portfolio TIV Portfolio AAL Portfolio AAL/TIV0%
5%
100 250 500
Return Period (years)
Cresta Zone Cresta Name Retained %
of Total Net
Percent Ceded
0 Unknown 0% 80%1.1 Tarapacá 2% 80%1.2 Antofagasta 2% 81%1.3 Atacama 1% 75%1.4 Coquimbo 2% 68%2 Valparaíso 11% 66%3 Santiago 60% 71%4.1 O’Higgins 3% 83%4.2 Colchagua 1% 77%4.3 Curicó 1% 83%4.4 Talca 1% 60%4.5 Maule 0% 52%4.6 Linares 1% 65%4.7 Nuble 1% 69%4.8 Concepción 2% 73%4.9 Bio-Bio 4% 63%4.10 Arauco 0% 66%5.1 Malleco 0% 69%5.2 Cautín 2% 71%5.3 Valdivia 1% 69%5.4 Osorno 1% 72%5.5 Llanquihue 1% 58%5 6 Chiloé 0% 85%
40Guy Carpenter
5.6 Chiloé 0% 85%5.7 Aisén 0% 60%5.8 Magallanes 0% 43%
Chilean Flotantes 3% 84%
Catastrophe Modeling: Model ComparisonReturn Period LossesUniform Risk Portfolio by Comuna
20.0%
V)
COUNTRYWIDE
Model A Model B
Uniform Risk Portfolio by ComunaReinforced Masonry- SFD Ground Up Losses (% TIV)
0.0%
5.0%
10.0%
15.0%
Gro
und
Up
Loss
(% T
IV
100 250 500
Return Period (years)
I
II
XVCITIES
VALPARAISO V
Model A Model B
METROPOLITANA XIII
Model A Model B
V
IV
III
II
0.0%
5.0%
10.0%
15.0%
20.0%
100 250 500
Gro
und
Up
Loss
(% T
IV)
i d ( )
0.0%
5.0%
10.0%
15.0%
20.0%
100 250 500
Gro
und
Up
Loss
(% T
IV)
Return Period (years)
X
IX
VIII
VII
VIXIII
XIV
Return Period (years)
15.0%
20.0%
(% T
IV)
MAULE VII
Model A Model B
15.0%
20.0%
oss
(% T
IV)
O'HIGGINS VI
Model A Model B
Return Period (years)
XI
XII
X
REGIONS
0.0%
5.0%
10.0%
100 250 500
Gro
und
Up
Loss
(
Return Period (years)
0.0%
5.0%
10.0%
100 250 500
Gro
und
Up
LoReturn Period (years)
41Guy Carpenter
Catastrophe Modeling: Damage RelativityReturn Period Losses – Model BUniform Risk Portfolio by ComunaUniform Risk Portfolio by Comuna
9 00%
Return Period Losses by LOB Return Period Losses Commercial by Year Built
4.00%
5.00%
6.00%
7.00%
8.00%
9.00%
s %
of T
IV
Commercial
Condominum6.00%
8.00%
10.00%
12.00%
% o
f TIV
Commercial by Year Built
1940
1960
0.00%
1.00%
2.00%
3.00%
100 250 500
Los
Return Period (years)
Residential
Industrial
0.00%
2.00%
4.00%
100 250 500
Loss
Return Period (years)
Unknown
1980
2000
Return Period (years)
DAMAGE RELATIVITY - Residential Reference
LOB AAL 100 250 500
Return Period (years)
DAMAGE RELATIVITY - Year Built 2000 Reference
YEAR BUILT AAL 100 250 500
Commercial 16.74% 10.34% 11.76% 12.79%Condominum 12.56% 11.37% 9.67% 9.04%Industrial -31.11% -35.69% -33.46% -31.94%Residential 0.00% 0.00% 0.00% 0.00%
1940 50.53% 58.98% 51.98% 48.07%1960 33.48% 38.72% 34.35% 31.81%Unknown 17.29% 19.82% 17.87% 16.69%1980 17.29% 19.82% 17.87% 16.69%2000 0.00% 0.00% 0.00% 0.00%
42Guy Carpenter
Pacific Northwest Earthquake ExposurePlate Tectonics – Cascadia Subduction Zone
PORTLAND, OREGON
SEATTLE, WASHINGTON
M9 J 26 1700 L t C di E th k
43Guy Carpenter
• M9 January 26, 1700 Last Cascadia Earthquake (from written records in Japan and geology studies)
Pacific NorthwestEarthquake Scenario
A future earthquake in the Pacific Northwest U.S., rupturing the entire Cascadia subduction zone (average recurrence of 500 years), may have similar rupture characteristics to the 2010 Chile
44Guy Carpenter
Disclaimer
The data and analysis provided by Guy Carpenter herein or in connection herewith are provided “as is” without warranty ofThe data and analysis provided by Guy Carpenter herein or in connection herewith are provided as is , without warranty ofany kind whether express or implied. Neither Guy Carpenter, its affiliates nor their officers, directors, agents, modelers, orsubcontractors (collectively, “Providers”) guarantee or warrant the correctness, completeness, correctness, merchantability, orfitness for a particular purpose of such data and analysis. In no event will any Provider be liable for loss of profits or any otherindirect, special, incidental and/or consequential damage of any kind howsoever incurred or designated, arising from any useof the data and analysis provided herein or in connection herewith.y p
45Guy Carpenter
www.guycarp.com