RMS believes the region is vulnerable following several disasters this year, such as the Palu earthquake in Indonesia and Typhoon Jebi hitting Japan.
The Asia-Pacific region is at risk from several “one in 100 year” major catastrophes, according to the modelling and analytics company RMS.
RMS believes the region is vulnerable following several disasters this year, such as the Palu earthquake in Indonesia and Typhoon Jebi hitting Japan. The company puts a 1% probability on a “major” destructive event occurring each year.
RMS has pinpointed its top 10 major catastrophe risks across the region. It believes the Pacific Ring of Fire, Indian Ocean - Asia Plate Collision zone, and high concentration of tropical cyclones pose a unique threat.
The firm believes New Zealand is at risk from an M7.5 Wellington earthquake that could cause liquefaction in its roads and harbour reclaimed from the sea.
RMS suggests South Korea is at risk from stalled depressions and major flooding in Seoul. While China’s risks include an M7.8 quake in Hebei province capable of causing tens of thousands of casualties.
RMS believes the Philippines is exposed to a severe tropical typhoon, while Indonesia is at risk from a volcanic eruption at Lombok, potentially registering up to 6 on the Volcanic Eruption Intensity Scale.
The modelling company believes Australia is potentially at risk from a transitioning cyclone comparable with the 1938 hurricane in the northeastern United States, which killed between 600-800 people.
The firm estimates Japan could be hit by a M6.9 earthquake, while Mumbai, India could be decimated by a category 4 cyclone. It says Taiwan is at risk from a M6.7 quake, and the city of Bangkok, Thailand, could be completely flooded by a cyclone taking an unusual path.
Robert Muir-Wood, chief research officer at RMS, described the list of potential events as “credible” and “not so extreme as to be beyond the concerns of the insurance sector”.
Muir-Wood added: “These are the kinds of events for which nations should also be managing their disaster risk reduction strategies. As we develop large stochastic simulations in catastrophe loss models, we discover a very large number of potential extreme events. This list should be considered illustrative and by no means exclusive.
“From major earthquakes in New Zealand, Sumatra or Japan, to flooding in India and Korea, or volcanic eruption shrouding Bali in ash; any one of these catastrophic events would have major implications for the region, country, people and insurance industry.”