Insurers project next San Francisco Great Quake
losses up to $105 billion
April 3, 2006
OLDWICK, N.J. -- (BUSINESS WIRE) -- As the centennial
anniversary of the Great San Francisco Earthquake and Fire of
1906 approaches, insurers are asking: What if it happened again?
The April issue of Best's Review reports that if a similar earthquake
occurred today, insured losses could reach $105 billion.
Risk management firm Eqecat predicts insured losses likely would
reach $30 billion to $40 billion, Risk Management Solutions estimates
$80 billion to $105 billion, and AIR Worldwide said insured property
losses would reach nearly $80 billion.
In a 2006 scenario, however, insurers have the advantage of catastrophe
modeling, which evolved out of the science and research that developed
in response to the 1906 quake. They also reap the benefits of
significant risk mitigation efforts, including updated building
mandates from the International Code Council and a modern fire-fighting
Most of the damage in 1906 came from the fire following the earthquake.
Offsetting some of insurers' advantages is the significant increase
in the number and value of insured properties. AIR Worldwide estimates
the current value of residential and commercial properties within
the damage footprint of the 1906 quake at more than $1.6 trillion.
Best's Review is published by A.M. Best Co., for insurance professionals,
including home office executives, agents, brokers and others who
are affiliated with the industry, including bankers, lawyers and