U.S. Earthquake Risk Breakout Final_US Earthquake Risk.pdfCoreLogic continues to monitor science...

U.S. Earthquake Risk

▪ Comparing results from Oasis vs. RQE® implementations▪ What’s coming in the next model update?▪ Aftershocks: a case study

David Gregory | Senior Earthquake Product ManagerTrey Apel, Ph.D | Principal Scientist – Model Development

U.S. Earthquake Risk: 2 Platforms, 1 ModelDavid Gregory | Senior Earthquake Product Manager

©2020 CoreLogic, Inc. All Rights Reserved. 3

Our Model

Our Goal

The Challenge

World class model: 30 year pedigree Hazard and vulnerability are regularly and

vigorously externally validated

To create platform agnostic data and insights, delivered your way

Ensuring results are “fit for purpose” in both platforms

Convergence of results

©2020 CoreLogic, Inc. All Rights Reserved.

The Challenge

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Convergence of results, ensuring results are ‘fit for purpose’ in both platforms

Ground Up ?The Financial Model is a key challenge

Random SamplingNumber of Samples

Gross Loss ?


Oasis – How many Samples?

Closer resultsvs

Run‐time trade‐off


AEP ResultsOEP Results

Ground up Loss Results comparison ‐ California

1 10 100 1000 10000Loss

Return Period

RQE

Oasis 10 samples

Oasis 20 samples

Oasis 30 samples

Oasis 120 samples

1 10 100 1000 10000

Loss

Return Period


1 10 100 1,000 10,000

Loss

Return Period

Ground Up Damage

Gross Loss

OEP Ground Up & Gross Loss Comparison ‐ US


The Challenge

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Convergence of results, ensuring results are ‘fit for purpose’ in both platforms

The Financial Model is a key challenge

*The ‘Oasis API feature for Complex Models’ allows CoreLogic to preserve the calculation of our losses

at the Ground Up level.

**The two financial models calculate the Gross Losses differently.

Ground Up Yes – within 5%*

Gross Loss Yes ‐ it’s more complicated**


‐7%

‐6%

‐5%

‐4%

‐3%

‐2%

‐1%

0%

1%

2%0 100 200 300 400 500 600 700 800 900 1000

Percentage change to RQE

Return Period

Gross Loss Results Comparison: California

Oasis numbers lower than RQE

Oasis numbers higher than RQE


‐1%

‐2%

0%1%

0%

‐2%

‐4%

‐1%

‐2%

1%1%1%

‐2%

‐4%

‐7%

‐6%

‐5%

‐4%

‐3%

‐2%

‐1%

0%

1%

2%0 100 200 300 400 500 600 700 800 900 1000


Return Period

Gross Loss Results Comparison: California

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Gross Loss Comparison: Pacific Northwest

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‐12%

‐10%

‐8%

‐6%

‐4%

‐2%

0%0 100 200 300 400 500 600 700 800 900 1000


Return Period

No loss below 1:25 year return period

No significant losses below 1:100 year return period


‐2%‐2%

‐3%

‐3%‐3%

‐7%

‐10%

‐2%‐2%‐3%‐2%‐2%

‐6%

‐9%

‐12%

‐10%

‐8%

‐6%

‐4%

‐2%

0%0 100 200 300 400 500 600 700 800 900 1000


Return Period

Gross Loss Comparison: Pacific Northwest

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‐50%

‐45%

‐40%

‐35%

‐30%

‐25%

‐20%

‐15%

‐10%

‐5%

0%0 100 200 300 400 500 600 700 800 900 1000


Return Period

Gross Loss Comparison: New Madrid Seismic Zone

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‐50%

‐45%

‐40%

‐35%

‐30%

‐25%

‐20%

‐15%

‐10%

‐5%

0%0 100 200 300 400 500 600 700 800 900 1000


Return Period

Gross Loss Comparison: New Madrid Seismic Zone

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The larger the sample size, the closer to 0% difference


Stratified AAL comparison (CatXL Premium)

Layer Layer activation Layer Exhaustion Oasis RQE Difference

CatXL1 50 yr 100 yr 19,660,018 20,934,425 6%CatXL2 100 yr 150 yr 8,489,698 8,867,259 4%CatXL3 150 yr 250 yr 8,471,230 8,606,768 2%

AAL

250yr

150yr

100yr

50yr

Retained

CatXL1

CatXL2

CatXL3

Retained


Summary

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Pattern of losses are not materially different

Differences at the Gross Loss level are exposure dependent

The Next Earthquake UpdateTrey Apel | Principal Scientist, Model Development


USGS 2018 Updates

1. Catalog ‐ updated seismicity catalog (2013‐2017)

2. CEUS GMPEs ‐ Central and eastern United States (CEUS), new ground motion models (GMPEs)

3. Basins ‐ in the Western United States (WUS), amplified shaking estimates of long‐period ground motions deep sedimentary basins in the Los Angeles, San Francisco, Seattle, and Salt Lake City areas

USGS (Petersen, et al., 2019)“Results show increased ground shaking in many (but not all) locations across the CEUS (up to ~30%), as well as near the four urban areas overlying deep sedimentary basins in the WUS (up to ~50%).

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U.S. Exposure

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Population in SA 1.0 Sec Hazard Change Bands

Change 475 years 2475 years

‐25% 3% 0.1%

5‐25% 54% 20%

±5% 35% 25%

5‐25% 5% 49%

25% 3% 5%

SA 1.0sec475 years

SA 1.0sec2475 years


Updated Catalog

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Figure 2 from Petersen et al., 2018


SA 0.2 sec – 2% in 50 year probability of exceedance


CEUS GMPEs

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Central and Eastern United States Ground Motion Prediction Equations

Table 1 from Petersen et al., 2019


CEUS GMPEs

NGA‐East for USGS (0.667)

Updated Seed GMPEs (0.333)

17 models (weights based on frequency and magnitude)

14 models (varying weights based on

geometric spreading and model type)


GMPEs Hazard Comparison

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WUS GMPEs and Basins

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Western United States Ground Motion Prediction Equations and Basin Amplification

No basin terms – Idriss 2014 crustal GMPE and Atkinson and Boore 2003 subduction



WUS GMPEs and Basins

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Western United States Ground Motion Prediction Equations and Basin Amplification

Figure 7 from Petersen et al., 2019Figure 9 from Petersen et al., 2019


Change Summary

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Model Change Impact RQE User

ImpactU.S.

Exposure

Catalog $ $

CEUs GMPEs $$ $$

Basins $$$ 0*

The HayWired Scenario: California Earthquake RiskDavid Gregory | Senior Earthquake Product Manager


Source: GNS & USGS

Canterbury/Darfield

Earthquake Loss ‐ Aftershocks

500 aftershocks associated with this event

~20 cause losses

2010 – 2011 New Zealand Earthquake Sequence

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The HayWired Scenario

Designed to look at loss potential from:

Modelled Loss

– Ground Shake

– Liquefaction

– Landslides

– Demand Surge

Modellable Loss

– Fire Following

– Sprinkler Leakage

Non‐Modelled loss

– Aftershocks

CoreLogic Was Honored to be Invited to Contribute

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The HayWired Scenario: Aftershocks


The Exposure At Risk

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Source: CoreLogic RCV

Residential & Commercial Reconstruction Cost Value (RCV) At Risk

$2,000+ Billion


The Losses

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Total Damage

$182 Billion

Main Shock Damage

$139 Billion

Total Insured Loss

$27 Billion

Main Shock insured loss

$23 Billion

76%

85%


The Loss Profile

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6% 5%11%

Damage to rubble?

Depends on winds, etc.Assumed an ‘average’ day

Mandated in all California homes from 2009

76%

Billion

s


0

20

40

60

80

100

120

140

160

180

Billion

sShake Losses – Aftershocks Over Time

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0

20

40

60

80

100

120

140

160

180

Billion

sAftershocks – Over Time

‘Typical’ Commercial carrier ‐ 7 day waiting periodCali res ‐ 15 day waiting period

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0

20

40

60

80

100

120

140

160

180

Billion

s

Event 15 Temblors

Event 25 Temblors

Event 32 Temblors

Event 44 Temblors

Aftershocks – Over Time

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Event 15 Quakes

Event 25 Quakes

Event 32 Quakes

Event 44 Quakes


The Loss Profile, Continued

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Billion

s


Summary

Loss potential from current studies are lower than expected (compared to New Zealand), though not immaterial.

CoreLogic continues to monitor science advances as they develop

Can provide clients with this study profile to test on their book of business.

Fire following & sprinkler leakage are equally as material.

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A key reason for this is the building stock: both countries and states have earthquake design codes, but properties in California have lower vulnerabilities

U.S. Earthquake Risk Breakout Final_US Earthquake Risk.pdfCoreLogic continues to monitor science...

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