of the region. These significant events, coupled with the rapid growth and
transformation of the insurance market and new requirements from Colombian
regulatory agencies, accentuate the need to incorporate catastrophe models
into risk management best practices. The RMS Colombia Earthquake Model
helps companies make informed risk management decisions for improved
accumulation management, price setting, and reporting solvency margins.
E a rt h qu a k e M od e l A p p l i c at i on s
The insurance industry in Colombia is undergoing a period of rapid transformationpremium volumes are
experiencing rapid growth, and new regulations are motivating greater sophistication in the market by
requiring the collection of higher quality exposure data. Additionally, the use of detailed financial catastrophe
risk modeling for solvency margins and investments is motivating greater competition and attracting foreign
players into the market. In this dynamic setting,
the Colombia Earthquake Model facilitates insurance
companies in managing earthquake risk accumulations,
setting pricing, and reporting solvency margins to the
rating and regulatory bodies.
70 W
N I
Barranquilla
C R
PA
Cucuta
V E
Bucaramanga
L o c a l S e i s m i c i t y E x p e rt i s e
Residential Lo s s C o st
Medellin
High
Bogota
C O
Cali
Low
B R
E C
P E
incorporate a wide breadth of expertise relating to seismic hazard, soil data, inventory information, and local
building standards into the model.
M od e l i n g C ol om b i a s E a rt h qu a k e H a z a r d
The Colombia Earthquake Model benefits from highly sophisticated earthquake risk modeling, simulating over
20,000 possible earthquake events, and utilizing a seismic source model that captures the unique characteristics
of Colombias tectonic setting. For a given event on a specific earthquake source, the model analyzes the
attenuation, or decay, of seismic energy with distance to determine the level of ground shaking at a particular
site. Ground motion calculations capture the effects of local site conditions, such as soil type and susceptibility
to liquefaction, by using a proprietary RMS geographic indexing system known as the variable resolution grid
(VRG), with up to 0.5 km resolution to store detailed hazard data. To optimize the trade-off between model
resolution and run time, grid cell size varies depending on exposure density and hazard gradient.
B u i l d i n g Vu l n e r a b i l i t y a n d
I n v e n t o ry M o d e l i n g
PP A
V E
C u c u tt a
B uu c aa r a m aa n gg aa
B o gg o tt a
Risaralda
CC O
Cali
Caldas
4.8
M
M e d e l l ii nn
Choco
E C
B R
P E
Quindio
5.4
8.2
7.4
Tolima
6.6
High
Low
Model Specs
H i s t o ry
Geographic Scope
All of Colombia
G e o c od i n g R e s ol u t i on
M od e l i n g P l at f or m s
L i n e s o f B u s i n e s s a n d C ov e r ag e s
Modeled
Residential,
commercial,
and
industrial
line
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