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20 June 2017 Almost one fifth of the population of the Middle East - approximately 40 million people - are now living in areas at risk of earthquakes, according to a new open source earthquake risk model released today by CATRisk Solutions and Lloyd’s. The new risk tool uses a bespoke seismotectonic source model to give a more accurate assessment of earthquake risk in: Bahrain, Iraq, Jordan, Kuwait, Lebanon, Oman, Qatar, Saudi Arabia, Syria, United Arab Emirates and Yemen. Importantly, the model uses the latest seismic data from all earthquakes that have occurred in the wider Middle East, as earthquake damage is often caused by tremors that occur outside the areas covered by existing risk models for the region. The Middle East has seen a rapid growth in urbanisation and economic development in the last thirty years. Of the 398 million people spread across the region, 56% live in cities. This figure is expected to rise to 68% by 2025. This combined with the impact of natural disasters is driving a high demand for new risk transfer products and services across the Middle East. Trevor Maynard, Head of Innovation at Lloyd’s, said: “Communities and businesses across the Middle East are unfortunately exposed to a whole host of natural hazards, including droughts, floods, storms and earthquakes. Despite these exposures, the Middle East is one of the few regions in the world that remains largely in the dark when it comes to catastrophe model coverage. “This new model will go some way to address that gap. By helping to identify and accurately assess risk exposures in the region we can help communities and businesses prepare for and build resilience to natural catastrophes. We anticipate applying the new techniques adopted here to other hazards in the region, such as tsunamis, landslides, windstorms and flood.” Between 1990 and 2014, the Middle East was hit by 200 moderate to large earthquakes, which killed almost 250,000 people and affected 10 million others, according to the new cat model Mark Cooper, General Representative Middle East, Lloyd's, said: “It is extremely important that Lloyd’s as the leading specialist insurance and reinsurance market, helps support local cedents and brokers with innovative thought leadership and commercial intelligence. This earthquake report for the Middle East region, will help those communities increase their understanding of the risks that they face and ultimately drive a more structured, cogent and diagnostic approach to underwriting earthquake risk in the region.” However, the region, with the exception of Turkey and Cyprus, has previously been largely overlooked by catastrophe modellers. Catastrophe (or ‘Cat’) models are a prerequisite for the provision of (re)insurance, because they allow underwriters to assess the severity and frequency of risk and accurately price their products. The new model is released on the Oasis platform, a new low cost way of accessing risk models. Oasis is increasingly popular as a platform for risk modelling because - rather than providing a static view of risk - it allows improvements to be added into the model on an ongoing basis, thereby ensuring that it is always based on the latest scientific research.
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