Earthquake

PCRIC’s earthquake product was redesigned in 2024 in collaboration with the risk modelling firm Temblor and the global (re)insurance broker WTW, with financial and technical support from the World Bank Group.

PCRIC’s approach uses a single trigger based on the number of people who experience severe ground shaking, similar to the Cyclone Impacted Population Index (CIPI) trigger which PCRIC uses for its tropical cyclone product. WTW serves as the calculation agent responsible for determining if a payout is due following an earthquake event.

Trigger: Earthquake Affected Population Index (EAPI)

The EAPI is based on the number of people impacted by severe ground shaking, defined as Intensity level VII or greater on the Modified Mercalli Intensity (MMI) Scale. As with the CIPI, the EAPI also takes into account the greater cost of reaching impacted populations located in remote areas. The EAPI trigger is designed as follows:

1. Population Disaggregation: The official population count from 2020, as developed by the New-Zealand research institute GNS Science for PCRIC using the most recent Pacific Islands censuses, is disaggregated into population points using the 30m population density map data of Meta for Good and road data from the Humanitarian OpenStreetMap Team (HOT). These population points are then aggregated into unique and distinct coverage zones. The population in remote coverage zones is artificially increased, giving remote communities more weight to acknowledge that providing disaster relief to remote regions comes with higher logistics costs, hence to trigger larger payouts under the policy. This adjustment results in the “Remoteness Adjusted Population” for each country.
2. Modelling of Ground Shaking: The Calculation Agent assigns the level of ground-shaking in each coverage zone as the maximum ground-shaking at any population point within that coverage zone based on the “ShakeMap” Product of the US Geological Survey (USGS).
3. Aggregating Results: The EAPI for the event is calculated by summing the “Remoteness Adjusted Population” across all coverage zones which have experienced ground-shaking of MMI VII or greater.
4. Triggering a Payout: The EAPI value is compared to a set of pre-determined thresholds, with higher EAPI values leading to larger payouts.

This method ensures the product reflects the number of people affected, including extra consideration for the increased cost associated with responding to impacted populations in remote areas.

Figure 1: Magnitude 7.4 earthquake which occurred close to Port Vila, Vanuatu on 17 Dec 2024. The EAPI was determined to be 78,935, resulting in a payout to the Government of Vanuatu.

Additional information

USGS ShakeMap: Real-Time Earthquake Ground-Shaking Monitoring

As illustrated in Figure 1, ShakeMap, developed by the U.S. Geological Survey is an internationally recognized solution to monitor real-time earthquake activity worldwide. This model is used to estimate earthquake ground-shaking intensity at any location, enabling PCRIC rapid payouts in the aftermath of earthquake events. ShakeMap leverages on the Global Seismographic Network (GSN) and the Advanced National Seismic System (ANSS), which operate over 3,000 seismic stations worldwide. Where seismic data is not available, ShakeMap relies on a globally tested ground motion model to fill in the gaps.

Temblor Catalog and EventSet: Historical and Probabilistic Earthquake Hazard Modeling

Temblor Catalog and EventSet are state-of-the-art earthquake datasets developed by Temblor and used to inform the pricing and structuring of all PCRIC earthquake policies. These datasets can also be very valuable for understanding past and future earthquake scenarios to support strategic planning and resilience-building efforts.

Key Features

1. Historical event set. The Temblor historical earthquake catalog, Temblor Catalog, is based on ANSS earthquake catalog prior to 2022. The full Temblor Catalog covers the period, 1905-2022, and is ‘temporally complete,’ meaning that for any time period, only earthquakes that can be uniformly detected and located worldwide are included. Thus, with time, the magnitude of included earthquakes decreases as more and better seismometers were deployed around the world.
2. Point sources and extended sources. Earthquakes below Magnitude 7.0 are defined by a point source rupture, with a single latitude / longitude coordinate and a depth value. Earthquakes with M ≥ 7.0 are defined by an extended source rupture, with a line fault segment.
3. Stochastic earthquakes: The stochastic event set, EventSet, is based on a Temblor proprietary strain rate model, called Temblor-GEAR, with 50 times the seismic data and 4 times higher spatial resolution than other existing global and regional models. Temblor-GEAR contains 200 million earthquake rates at 0.1° x 0.1° cells for M 5.0-9.5, with rates averaged over 0-70 km depth. The resulting EventSet is a globally consistent 50,000-year simulation of earthquake locations and magnitudes.