June 14th, 2011

Earthquake in New Zealand

Posted at 12:58 PM ET

nz-eq-june-14-smallAnother strong earthquake hit New Zealand’s South Island at 02:20 UTC on June 13 (14:20 local time), destroying buildings already weakened by two previous earthquakes that hit the region in September 2010 and February 2011. The latest event, measuring 6.0 Mw, was located 13 kilometers (8 miles) west of Christchurch and centered a shallow 9 kilometers (5.6 miles) underground, according to the US Geological Survey (USGS). The New Zealand Institute of Geological and Nuclear Sciences (GNS Science) recorded a magnitude of 6.3 for the event. According to the USGS, more than 430,000 people live in areas impacted by a Modified Mercalli Intensity (MMI) of V or higher. Christchurch, New Zealand’s second largest city with a population of around 364,000, experienced intensity VII on the MMI scale, equivalent to severe shaking with the potential to cause heavy damage to vulnerable structures and moderate/heavy damage to more resistant structures. The event was preceded by a 5.2 Mw earthquake and around 40 aftershocks have been recorded. GNS Science has warned the latest seismic activity is likely to trigger new aftershocks.

Prime Minster John Keys said the latest earthquakes were likely to be treated as new events for insurance purposes. According to EQECAT, the 6.0 Mw event is estimated to have caused losses of between USD3 billion and USD5 billion. Although the earthquake is unlikely to have caused significant damage to buildings that remain structurally sound, incremental damage and losses are expected to those that had been damaged by the prior events, according to EQECAT. The city of Christchurch took the brunt of the shaking. Early damage assessments indicate many weakened buildings collapsed in Christchurch’s central business district (CBD), prompting officials to evacuate the area. Officials said 75 buildings that were previously thought to be safe had now been condemned in the CBD. Several other buildings collapsed completely, and Christchurch Cathedral, badly damaged by February’s earthquake, lost more of its masonry. Reports said dozens of people were injured by the falling debris. The city’s airport was temporarily evacuated following the earthquake and several businesses were forced to close.


Hazard data illustrated in the CAT-i map was taken from i-aXs®, Guy Carpenter’s web-based risk management platform. i-aXs users can view impacted areas on any map as well as see how their portfolios were affected. Please contact your broker or GC Analytics(SM) representative for assistance or go to www.i-axs.info for further information.

The latest events also inflicted significant damage on weakened property outside of Christchurch, which officials said would now have to be demolished for safety. Some property damage was reported in the suburbs of Merivale and Lyttelton. Lyttelton Port of Christchurch sustained further damage. Elsewhere in Lyttelton, huge chunks of masonry crashed onto the street as shop facades toppled. Around 55,000 households lost power following the earthquake and reports said further liquefaction occurred at a number of locations, particularly in Sumner, Burwood and Bexley. Several schools were closed and a welfare center was set up in the suburb of Aranui for people unable to return to their homes.

Although the latest earthquakes were on a different fault to the event that shook Christchurch on February 22, they are part of the same aftershock sequence that was initiated by the Darfield earthquake in September 2010, according to GNS Science. According to estimates, insured losses from the Darfield earthquake are expected to be around USD4.5 billion while the Christchurch earthquake in February is expected to incur industry losses of between USD7 billion and USD12 billion. Prime Minister Keys said he did not expect the latest shake to have a major impact on the NZD15 billion (USD12 billion) Christchurch rebuilding program because the worst-hit areas had already suffered major damage during the previous events. After the February earthquake, Prime Minister Keys estimated that about 10,000 homes would have to be demolished and entire suburbs abandoned due to liquefaction. On June 13, the prime minister confirmed that thousands of homes will have to be abandoned but declined to specify which areas would be affected, saying homeowners would be told when negotiations with insurers were complete.

Table 1: Estimated Population Exposed to Significant Earthquake Shaking

Estimated MMI

Estimated Population Exposure

Perceived Shaking






Very strong







Sources: USGS, WSI, Reuters News, Associated News, Agence France Presse, CNN News, BBC News, EQECAT, Wall Street Journal, New Zealand Associated Press

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Guy Carpenter publishes CAT-i reports for major natural catastrophes worldwide. These reports cover catastrophes including worldwide tropical cyclones, earthquakes, major UK and European floods and any other natural event that is likely to incur a significant loss to the (re)insurance industry. Please email CAT.i@guycarp.com if you wish to be added to the free email distribution list.

Guy Carpenter compiles RISK-i reports for major technological or man-made events worldwide. These reports cover risks to property, transport and life including explosions, fires, crashes, engineering disasters and terrorist attacks that are likely to incur a significant loss to the (re)insurance industry. Please email RISK.i@guycarp.com if you wish to be added to the free email distribution list

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