AIR Worldwide Estimates Insured Losses from September 19, Central Mexico, M7.1 Earthquake
BOSTON, Sept. 22, 2017 — Catastrophe modeling firm AIR Worldwide estimates that industry insured losses from the M7.1 earthquake that struck central Mexico at 1:15 p.m. local time on September 19, 2017, will be between MXN 13.0 billion and MXN 36.7 billion.
While the M7.1 Puebla earthquake comes only 11 days after the M8.1 earthquake that occurred 650 km to the southeast—and both events were related to the subduction of the Cocos plate beneath the North American plate—the M7.1 event occurred too far north along the subduction zone to be an aftershock of the September 7, 2017, earthquake according to the USGS.
This M7.1 earthquake occurred in central Mexico, roughly 55 km south-southwest of the city of Puebla and 120 km southeast of Mexico City, where major damage and hundreds of fatalities have been reported. The President of Mexico declared a state of emergency for areas impacted by the M7.1 quake. In Mexico City, 52 buildings collapsed, including a 10-unit apartment building, a four-story school, and a three-story textile factory; about 500 more buildings were damaged throughout the capital, including 22 hospitals, several churches, a sports arena, and a medical laboratory.
According to the Federal Electricity Commission, power was restored on the night of September 21 to 4.63 million households and business, representing 95% of those that had lost power after the quake, mostly in Mexico City and in the states of Guerrero, Morelos, Puebla, Oaxaca, and Tlaxcala. Telephone lines were downed, and gas mains were ruptured. Schools in the region have been closed until further notice.
According to AIR, the majority of residential buildings in Mexico are of masonry construction, falling into one of three classifications: reinforced masonry, confined masonry, and unreinforced masonry. Unreinforced masonry is the construction type most vulnerable to shake damage. Commercial buildings in Mexico are primarily of engineered masonry or concrete construction, and are better able to withstand ground motion. In Mexico City, most middle- to upper-class families live in five- to 15-story reinforced concrete commercial dwellings. These buildings are generally well designed and built with high quality materials. However, reinforced masonry and confined masonry buildings still account for a large portion of the building stock of Mexico City.
AIR’s loss estimates explicitly capture damage from ground shaking. Note that AIR’s estimates of insured losses are based on assumptions about take-up rates in Mexico (the percentage of properties actually insured against the earthquake peril), about which there is considerable uncertainty. Please note that total economic losses are expected to be much higher than industry insured loss estimates. The range in AIR’s loss estimates reflects uncertainty in earthquake source parameters, modeled ground motion, and damage estimation.
About AIR Worldwide
AIR Worldwide (AIR) provides risk modeling solutions that make individuals, businesses, and society more resilient to extreme events. In 1987, AIR Worldwide founded the catastrophe modeling industry and today models the risk from natural catastrophes, terrorism, pandemics, casualty catastrophes, and cyber attacks, globally. Insurance, reinsurance, financial, corporate, and government clients rely on AIR’s advanced science, software, and consulting services for catastrophe risk management, insurance-linked securities, site-specific engineering analyses, and agricultural risk management. AIR Worldwide, a Verisk (Nasdaq:VRSK) business, is headquartered in Boston with additional offices in North America, Europe, and Asia. For more information, please visit www.air-worldwide.com.