Risk modeller EQECAT released the first insured loss estimate for the recent 13th June M6.0 earthquake in Christchurch, New Zealand on Tuesday. Their initial loss estimate was for damages of between $3 billion and $5 billion from this event. This seems reasonable given that the city has suffered so much damage and has so many buildings in a state of disrepair.
However, politicians from New Zealand have questioned the estimate and said that they feel it is an over estimation of losses. Prime minister John Key called the report from EQECAT a “massive overestimation” while finance minister Bill English questioned the estimate and said he had seen no basis for “a large number like that”.
Now, EQECAT have published a report looking at how they came to their estimate. It’s thorough and demonstrates the reasoning behind the risk modellers initial estimate which they stick to. Read the full report here.
Given the magnitude of the earthquake, the photos and videos of damage and the shaking that occurred (some of the videos that have emerged clearly demonstrate that this was a major quake) and the fact that much of the cities buildings were already damaged by the earlier quakes, EQECAT’s loss estimate seems perfectly reasonable.