"Tremors on a daily basis"

Steimen: It is too early to foresee what impact this event might ultimately have. With a 8.6 magnitude of the first quake it definitely is a very strong event.  But it seems likely that the impact of this quake was not as devastating as in 2004, when the earthquake had a magnitude of 9.1, which is considerably stronger.

Further, this time the mechanism of the rupture is different which impacts how and if a tsunami develops. After all, the Tsunami warning was cancelled after a couple of hours.

We're talking about less than a decade since the catastrophe in South-East Asia happened. Is this region particularly dangerous?

Steimen: The seismic activity in this region is one of the highest in the world – tremors of some extent can be observed on a daily basis. These minor motions usually don't cause much damage. Events like the current one don't happen so often, but it is not a complete surprise either that a major quake hit that same region again after a few years.

Which factors decide the impact of such an earthquake, apart from the magnitude?

Steimen: The deeper underground an earthquake happens, the less it is felt at the surface as the seismic waves are dampened when traveling through the earth. Also, it makes a difference for affected societies whether it happens in close proximity to populated areas or far out in the sea. In the current case, the tremor happened about 400 km out of the coast and in a depth of 23 km. If an earthquake happens below sea surface, it is of critical importance in what direction the earth moves. Today the main relative movement of the tectonic plates was in horizontal direction. Back in 2004 the main relative movement of the plates was in vertical direction. Although it is not impossible that a tsunami is generated by today's earthquake mechanism, the likelihood of generating a massive tsunami with a vertical movement of the earth plates is higher.

Sibylle Steimen, seismologist and head of cat risk management at Allianz Re

The earthquake took place off the coast of Sumatra, triggering a tsunami warning throughout the Indian Ocean region

Steimen: They help a lot – in regions where a tsunami warning system is installed, warnings are issued within minutes after a larger earthquake under the sea and they can save lives. If thousands, hundreds or only a few lives are saved depends on how far away from the coast the earthquake has happened and how good the people are informed what to do in case of an alarm. If the tsunami was triggered very nearby, like last year in Japan, the remaining time for people to escape before the wave hits the land is short.

This time, in many of the countries, e.g. Thailand, immediate warnings urged people in the coastal regions to resort to higher located areas inland as fast as possible. Fortunately, the real tsunami didn't come this time. Another time this measure will save many peoples’ lives not only but also because the event of 2004 is still in the memory of the people living in the potentially affected areas.

How will  insurance and reinsurance be impacted by this earthquake – the heaviest nat cat event of 2012 so far?

Steimen: The event we are speaking of happened far off shore. Although the magnitude was high, the nearest distance to the next population center in Banda Aceh is around 430 km. Over such a distance, the seismic waves are already damped quite a bit so that the remaining shaking affecting this region was only capable to generate light damages – if at all. This is supported by first observations in the region. Would a tsunami have been generated, the situation would be completely different one as we sadly learned in 2004 and just recently in Japan 2011.

Insurance penetration in the South-East Asia region is way below the levels in Japan, US or Europe. So the insured losses still tend to be much lower than the economic losses in these countries for the time being.

 
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Christiane Merkel

Allianz SE Reinsurance
Phone +49.89.3800-18195

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