The FINANCIAL -- Almost one fifth of the population of the Middle East – approximately 30 million people – are now living in areas at risk of earthquakes, according to a new Oasis earthquake risk model released on June 20 by CATRisk Solutions and sponsored by 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.
Cameron Murray, Lloyd’s Head of Middle East & Africa, added:
”This earthquake report for the Middle East will help communities in the region 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. It is an exciting example of the kind of innovative thought leadership and commercial intelligence that Lloyd's will increasingly look to provide across the Middle East and Africa region, reinforcing our reputation as a centre of excellence and a trusted partner for cedants and brokers.”
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.
However, the region, with the exception of Israel, 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, which is supported by Lloyd’s, a new low cost way of accessing risk models.