The U.S. Geological Survey (UGCS) Company has released an updated version of their U.S. National Seismic Hazard Maps, detailing greater earthquake exposure across the East and West coast than previously believed.
This is the first time the maps have been updated since 2008 and the new version shows that national-level details and estimates now differ for many cities and states.
The report explains that the eastern U.S. has the potential for more financially damaging and larger earthquakes than the 2008 maps and assessments had forecast. Scientists were aided in their research for the eastern states when Virginia was hit by a 5.8 magnitude quake in 2011, one of the largest to strike the east coast in the last century.
On the western coast, within California, several areas exposure was increased due to the discovery of new fault lines and, earthquake hazard now extends over a greater distance. Meanwhile, several other areas of California saw their exposure decrease as new data provided greater insight into surrounding fault lines, these include; Irvine, Santa Barbara and Oakland.
Also the New Madrid earthquake zone has been found to have a larger range of potential earthquake magnitudes and locations than previously identified, thus raising the risk of that region as well.
UGCS’ new maps and data highlights 16 states which are at higher risk of seismic activity than previously believed, they are; Alaska, Arkansas, California, Hawaii, Idaho, Illinois, Kentucky, Missouri, Montana, Nevada, Oregon, South Carolina, Tennessee, Utah, Washington and Wyoming.
With greater risk exposure for 16 states and the reality that 42 out of the 50 U.S. states are vulnerable to at least damaging ground shaking from an earthquake, perhaps earthquake exposed catastrophe bonds, and collateralized reinsurance is riskier than the models might currently suggest.
It’s likely that the main risk modelling firms will be updating their earthquake models to reflect any new science or understanding of the risks surrounding earthquakes in the United States, perhaps factoring in some of the USGS’ findings into their next iterations.
The increase to understood earthquake risk exposure has the potential to be damaging for reinsurers and ILS investors alike, as an investment or underwritten contract, previously believed to be sound or a low exposure risk, could actually be underestimating the risk according to the new USGS view of earthquake hazards across the U.S.
You can access more information about the new U.S. National Seismic Hazard Maps here.