J.B. Boda Reinsurance Brokers Pvt.Ltd. - Cat Modeling Section

Relationship between JBBRI and Modeling Companies
JBBRI remain in touch with various modeling companies through in-person meetings as well as webinars to know their products as well as to keep themselves updated about the prevalent practices in the industry. Currently, we have business relationships with all lead modelers and can carry out cat modeling for our clients located in different geographies.
What is Catastrophe Modeling (Cat Modeling)?
Cat Modeling is the process in which a computer program, that includes information about hazards and vulnerabilities of a location as well as policy details, is used to compute insured losses due to a natural peril. Currently, Cat Modeling is a prevalent practice in the global insurance and reinsurance industry to calculate losses for events such as earthquakes, cyclones and floods.
Cat Modeling Case Studies
J. B. Boda Reinsurance Brokers Pvt. Ltd. carried out cat modeling for two clients recently. Both clients provided well-distributed exposure data and exposure assumptions and treaty structures. JBBRI verified those and subsequently carried out cat modeling using a prevalent model. Based on these loss numbers, JBBRI designed the reinsurance program of those clients. Likewise, JBBRI carried out Actuarial Modeling for one of its clients.
Earthquakes in India*
In the last 25 years, 10 major earthquakes have resulted in over 25,000 deaths. The regions far away from the Himalaya and other inter-plate boundaries, which were once considered to be relatively safe from strong earthquakes, have also experienced several devastating earthquakes. Table 1 shows list of some significant earthquakes in and around India.
Date Earthquake Magnitude Max. Intensity
16 June 1819 Great Kachchh 8.3 IX
12 June 1897 Great Shillong 8.7 XII
08 February 1900 Coimbatore 6 VII
04 April 1905 Great Kangra 8 X
15 January 1934 Great Bihar-Nepal 8.3 X
26 June 1941 Great Andaman 8.1 X
15 August 1950 Great Assam 8.6 XII
21 July 1956 Anjar 6.1 IX
10 October 1956 Bulandshahar 6.7 VIII
28 December 1958 Kapkote 6.3 VIII
02 September 1963 Badgam 5.5 VII
10 December 1967 Koyna 6.5 VIII
23 March 1970 Bharuch 5.2 VII
19 January 1975 Kinnaur 6.5 VIII
29 July 1980 Pithoragarh 6.8 ??
31 December 1984 Silchar 5.6 ??
26 April 1986 Dharamshala 5.5 ??
21 August 1988 Bihar - Nepal 6.6 IX
20 October 1991 Uttarkashi 6.4 IX
30 September 1993 Killari (Latur) 6.2 VIII
22 May 1997 Jabalpur 6 VIII
29 March 1999 Chamoli 6.6 VIII
26 January 2001 Bhuj 7.7 X
14 September 2002 Diglipur 6 VII
26 December 2004 Great Sumatra 9.3 XII
08 October 2005 Kashmir 7.4 X
14 February 2006 Sikkim 5.7 VII

The huge losses of life and property in the earthquake-prone areas of the country have shown that the built-environment is extremely fragile. Post-earthquake damage survey revealed that 90% of casualties result directly from the collapse of buildings that had usually no earthquake resistant features. Secondary events, such as landslides, fires, and tsunamis, account for the remaining 10% of the casualties.

The varying geology at different locations in the country implies that the likelihood of damaging earthquakes taking place at different locations is different. Thus, a seismic zone map is required to identify these regions. The current Indian Seismic Zone Map prepared in 2002, has four seismic zones.

About 59% of India's land area is under the threat of moderate to severe earthquake shaking intensity VII and higher.

Table 1 shows percentage of area in country falling in different zones.

Zone Intensity % of Total Land Area
Zone V Very High Risk Zone 10.79
Zone IV High Risk Zone 17.49
Zone III Moderate Risk Zone 30.79

97 districts of country have more than 50 % of land area in Zone V and rest is in Zone IV. However, the insured exposure in these districts is not much. However, with increase in economic activities, insured exposure is increasing. Therefore, a future event might be catastrophic.

Table 2 below shows losses - both insured and economic - occurred due to recent earthquakes in and around India.

Date Region Economic Loss USD Insured Loss USD
26 January 2001 Gujarat $4.6 Billion 100 Million
08 October 2005 Kashmir, Pakistan $5.2 Billion 5 Million
30 September 1993 Latur, Maharashtra $1.3 Billion N/A