Canterbury Statistics Day 2012
4th September 2010 Earthquake
• 7.1 magnitude earthquake 40km
south west of Christchurch
• Happened at 4.30am
• No loss of life
• Major building damage
(unreinforced masonry buildings
and chimneys)
• Major land damage (extensive
liquefaction, particularly in East of
Christchurch (near beaches and
rivers)
Canterbury Statistics Day 2012
Earthquake Locations
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Times Series of Earthquake Magnitudes
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Building Damage
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Land damage
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Land damage
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Power, water & sewage damage
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Liquefaction
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Most Chimneys lost
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NZ Earthquake Commission (EQC)
• Set up by Act of Parliament (1993)
• Compulsory insurance component
on all home policies
• Cover to 100,000 (+GST) – median
house price in 1993.
• Private insurer covers excess over
100K cap
• 3 months to claim after an event
• Holds $5.6 billion reserves plus
reinsurance for excess
Canterbury Statistics Day 2012
September Survey
• EQC approached me in December to
help estimate their liability for
houses (excluded land costs)
• Too many (180,000!) claims to cost
• Worst properties assessed first so
biases in using this data
• All claims in the database (after the
90 day limit)
• Able to use the claim database as a
sampling frame
• Sample unit = claim
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September Survey
• Stratified Canterbury into 15 zones
• 5 regional zones
• 10 Christchurch Zones
• Christchurch zones formed by
clustering suburbs on damage and
geographical proximity
• Sampling with probability
proportional to size
• Some claims were duplicated
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Canterbury Zones
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Christchurch Zones
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Estimated EQC liability
• $2.86 billion
• Error estimates by
bootstrapping
• 95% CI
$2.52 – 3.16 billion
• 1.2% had duplicate
claims
• 2.7% of claims
declined
• Survey only half
completed when
February
earthquake
occurred
Canterbury Statistics Day 2012
22 February Earthquake
• 6.1 magnitude centred in Port Hills
right by Christchurch
• Happened at mid day on Tuesday
(many people in city centre)
• Extensive building damage
• Loss of life (180)
• Extensive liquefaction
• Worst in Hills and East and Central
city (tall brick & stone buildings)
• Cliffs collapsed & many runaway
boulders
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Central City badly damaged
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Most old stone buildings damaged
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People killed by falling masonry
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People killed by falling masonry
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Building Damage
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Modern Reinforced Buildings collapsed
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More extreme liquefaction
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Houses on hills severely shaken
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Cliffs collapsed
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February Earthquake Shake Intensity
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New Survey to assess February
• Based on rapid assessment database
(not all claims in + multiple claims)
• House/property became the
sampling unit
• Christchurch only
• Many errors in database
(46 spellings of Rangiora!)
• Duplicated addresses (10%) and
missing addresses (12%)
• Estimated number of houses in
Christchurch as 186,000 using
Council records
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Survey Design
• Doubly stratified survey
• 12 geographic zones, by 6 damage
classes (None – Rebuild)
• Geographic zones by clustering
suburbs using rapid assessment
data
• Numbers in zones proportional to
size
• Numbers in damage classes
proportional to expected cost
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Expected Claim by Suburb
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12 Zones
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Survey Samples
Zone
None
Minor Moderate
Serious
Severe
Rebuild
Total
River
4
10
18
10
14
22
78
Hill
6
14
32
12
20
14
98
NWCentral
6
24
32
10
10
14
96
Beach
4
20
24
10
6
8
72
Bays
2
4
4
4
4
2
20
South
2
4
4
4
4
2
20
North
6
10
6
4
4
6
36
ECentral
6
28
26
6
4
6
76
NCentral
4
12
12
4
4
4
40
SWCentral
14
40
32
4
4
4
98
NWest
14
40
30
4
4
4
96
West
14
30
14
4
4
4
70
Total
82
236
234
76
82
90
800
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Survey Results
• EQC Liability $6 Billion
• Other insurers liability $2.5 billion
• Total residential rebuild $8.5 billion
• 90% of households made a claim
• 2% households uninsured
(mainly in wealthier suburbs!)
• 63% of damage occurred in February
• September estimates were consistent
with previous survey
• 15% of properties over 100K damage
• 100,000 properties to be repaired by
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Fletchers
Survey Results
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Varying patterns of damage
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May Court Case Insurers vs. EQC
• EQC now liable for $100,000 for each event
• Total Damage must be apportioned across all
•
events
Transferred $500 million of liability to EQC
350
300
Insurer
EQC
Feb
June
250
200
150
100
50
0
Total
EQC $100K
Pre-May
Sept
Feb
June
Sept
EQC $160K
EQC $300K
EQC estimate
Insurer estimate
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June 13 Earthquake
• 6.1 magnitude earthquake
• Further damage & liquefaction
(often to worst affected suburbs)
• Revisited all survey houses
• Estimated extra $420 million in EQC
liability
• Only added another 5% to the bill
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Monitoring Estimates vs. ‘Actuals’
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Broken down by damage class
Comet
overestimating
lightly damaged
buildings
and under
estimating
badly damaged
buildings
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Reinsurer Survey
• Reinsurers wanted a estimate of their
liability – apportionment very
important for this
• Used EQC list of properties with claims
• Doubly stratified survey
• Same 12 geographic zones, by Land
damage classes (NA,TC1,2,3, Red)
• Numbers in zones proportional to
population size
• Oversampled in TC3 and Red Zones
• 4 Batches of 500 completed
• Reinsurers happy with ‘novel’ process
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Reinsurer Survey Results
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Number of Claims/Property
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Private Insurer Survey
• To obtain a bulk apportionment
between EQC and private insurers on
“over-cap” properties
• Took 9 months to get sampling frame!
• Triply stratified survey Insurer x
geographic zones x Land damage class
• Numbers by insurer proportional to
market share
• < 30 properties completed after 3
months!
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Summary
• Surveys give unbiased estimates and
random sampling covers the whole
population
• Sampling frames and stratification
adapted to the situation
• Surveys a great way of testing a
process
• Monitor the process from the start to
obtain learning
• Doing samples by batches gives early
but balanced results plus early
stopping options
Canterbury Statistics Day 2012