The city of Vancouver has released a map that highlights areas that would see the most severe damage during a significant earthquake — and there are an alarming number of them.
“Part of the reason we developed that map is . . . first we needed to understand our risk (and) we needed to understand areas of urban resilience,” said Katie McPherson, Vancouver’s chief resilience officer.
“Currently we lack the regulatory environment (to implement policies) of places like California and New Zealand,” she said.
The province sits on the city’s seismic policy advisory committee and the federal government has been helping with modelling work.
“We’re hopeful that they’ve said they’re willing to partner with us in exploring these policy options and that’s really the next step,” Ms. McPherson said.
“But it’s going to take significant commitment from all levels of government to really advance this, and that’s what we’ve seen in other places. Cities have taken steps but in places like California it’s been statewide regulation that has been one of the main drivers of this.”
One hopeful sign is that senior levels of government have shown great interest — and investment — in combination retrofits for climate change and seismic upgrade.
“It kind of makes sense. If we’re building buildings to survive in a future climate let’s create buildings that can also survive in any other kind of disaster.”
Ms. McPherson is the first to admit that she’s no expert on insurance, but . . .
“One thing I would like to see more of is better incentives for people to invest in retrofit from the insurance industry.
“Right now there really isn’t a significant benefit for people based on lower insurance premiums if they invest in those retrofits, and that is something that in California has really driven pre-investment in resilience.”
Meanwhile, a new Canadian study suggests that a major earthquake in Canada would likely cause a domino-like financial collapse of the insurance industry here.
The study, which was published recently in ‘Geneva Papers on Risk and Insurance – Issues and Practice,’ is co-authored by University of Calgary Haskayne School of Business professor Anne Kleffner, Wilfrid Laurier University insurance chair Mary Kelly, and Grant Kelly, chief economist and VP of financial analysis and regulatory affairs at the Property and Casualty Insurance Compensation Corp.
“Canada is the only G7 nation that doesn’t have any type of federal involvement to help the insurance industry as a whole deal with mega-catastrophes,” Ms. Kleffner said. “Without some type of intervention, such an event will result in serious economic consequences for Canadians.”
She said the risk isn’t considered urgent in Canada because a major earthquake hasn’t captured people’s attention nor have elected officials heeded the insurance industry’s warnings. Without government involvement, she said, Canada’s insurance industry would likely collapse due to the relatively small size of the market.
The study estimates that if total insured losses reach more than $35bn due to an earthquake, as many as 18 insurers would likely to go bankrupt.
A 2013 IBC study found that the overall cost after a magnitude 9 earthquake in B.C. would cost $75bn. Costs of a 7.1 magnitude earthquake in the Quebec City-Montreal- Ottawa corridor were estimated at almost $61bn.
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