AIR Estimates Chile’s Earthquake Losses Will Not Exceed $80 Million

Catastrophe risk modeling company AIR Worldwide Corporation estimated insured losses from the major earthquake which struck the coast of Chile will likely not exceed $80 million. The USGS issued a preliminary magnitude estimate of 7.7Mw. Depth was estimated at 37 miles.

“The quake struck a relatively sparsely population region in northern Chile, but was felt as far away as Santiago, some 1,245 km to the south,” said Guillermo Franco, senior research engineer at AIR Worldwide. “A tsunami warning was issued for Chile and Peru, but was lifted within an hour.”

The town nearest the epicenter, Tocopilla, has a population estimated at about 30,000. The nearest sizeable concentration of property is the northern port city of Antofagasta, about 170 km south of the epicenter. Antofagasta is both the provincial and regional capital, with a population near 300,000.

Toppled utility poles have cut power and communications to some areas. Several houses in Tocopilla are reported to have been damaged and local television showed the collapsed portico of a hotel in Antofagasta. However, it is still in the early aftermath of this event, and damage may be more extensive in more remote towns and villages nearer the epicenter. Homes in these areas, however, are unlikely to be insured.

“Wednesday’s earthquake occurred along a trench where the Nazca plate is subducting beneath the South America Plate (SOAM),” continued Franco. “There is some debate as to the rate of subduction. One model suggests a plate motion of about 80 mm/yr, though recent GPS data would suggest a somewhat slower rate and other studies suggest that the rate of subduction is actually decelerating.”

Franco commented, “In the last century, there have been about 15 earthquakes with magnitude greater than 5.0 in this area of Northern Chile. We are continuing to monitor the situation and currently there are reports of significant aftershocks in the region.”

The insured loss estimate is a result of several factors, including the depth at which the rupture occurred, the sparse population in the epicentral region and the low take-up rates for residential properties. Both parameters of the earthquake (magnitude and depth) may change as additional information comes in from networks around the world.

Source: www.air-worldwide.com.