A massive earthquake struck off the coast of Maule in Chile at 06:34 UTC on February 27(03:34 local time), causing severe damage across of the country and claiming up to 800 lives in Chile’s biggest earthquake for around 50 years. The earthquake, measuring 8.8 Mw, was located 60 miles (100 kilometers) north-northwest of Chillan and 205 miles (330 kilometers) southwest of Santiago, according to the US Geological Survey (USGS). The USGS added that the quake was centered about 21.7 miles (35 kilometers) underground and was felt in Argentina. This is the joint fifth largest earthquake ever to be recorded, according to the USGS. Around 200 aftershocks have hit the region since the main earthquake, the most powerful at 6.9 Mw.

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A strong earthquake struck southern Taiwan at 0:18 UTC earlier today, causing minor damage and disrupting transport. The earthquake, measuring 6.4 Mw, was located 25 miles (40 kilometers) west-northwest of Taitung and 40 miles (60 kilometers) east-southeast of Tainan, according to the US Geological Survey (USGS). The USGS added that the quake was centred about 14.4 miles (23.1 kilometers) underground. Fifteen aftershocks have been recorded following the main earthquake, reports said. The USGS said more than 3.1 million people live in areas impacted by a Modified Mercalli Intensity (MMI) of V or higher (see Table 1 below), equivalent to moderate shaking with the potential for light damage. This number includes the 765,000 people living in the city of Tainan, the USGS said. No tsunami alert was issued.

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A powerful Atlantic storm named Xynthia battered western Europe with hurricane-force winds, surging seas and driving rain on February 27 and 28, causing widespread property damage and severely disrupting transport networks and infrastructure. The most severe damage was predominantly seen in western France, though disruption was reported across several countries in western Europe. According to recent estimates, the storm left at least 62 people dead across France, Germany, Spain, Portugal and Belgium, and more than 1 million households lost power at the height of the storm. At least 51 of the fatalities occurred in France, which was the country worst-affected by the windstorm.

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Frank Achtert, Managing Director, Financial Intelligence Team, and Maximilian Strasser, Vice President
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In 2009, the Committee of European Insurance and Occupational Pensions Supervisors (CEIOPS) issued details of its Level 2 implementation measures for Solvency II in three waves of consultation papers. The capital charge for the catastrophe risk sub-module (NLCAT), a key driver of capital for non-life carriers and reinsurers, is covered in various publications, primarily in “CEIOPS’ advice for Level 2 Implementation Measures on Solvency II: SCR standard formula - Article 111 Non-Life Underwriting Risk (former CP 48)” and Consultation Paper (CP) 71 - “SCR Standard Formula - Calibration of non-life underwriting risk”. It should be noted that the proposals made in CP71 are subject to a consultation process resulting in recommendations to the European Commission in spring 2010 and therefore, may not be final. Notably these rules have been not covered by CEIOPS’ final advice to the European Commission (EC) published at the end of January 2010.  

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Frank Achtert, Managing Director, Financial Intelligence Team, and Maximilian Strasser, Vice President
Contact

In 2009, the Committee of European Insurance and Occupational Pensions Supervisors (CEIOPS) issued details of its Level 2 implementation measures for Solvency II in three waves of consultation papers. The capital charge for the catastrophe risk sub-module (NLCAT), a key driver of capital for non-life carriers and reinsurers, is covered in various publications, primarily in “CEIOPS’ advice for Level 2 Implementation Measures on Solvency II: SCR standard formula - Article 111 Non-Life Underwriting Risk (former CP 48)” and Consultation Paper (CP) 71 - “SCR Standard Formula - Calibration of non-life underwriting risk”. It should be noted that the proposals made in CP71 are subject to a consultation process resulting in recommendations to the European Commission in spring 2010 and therefore, may not be final. Notably these rules have been not covered by CEIOPS’ final advice to the European Commission (EC) published at the end of January 2010.

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The Guy Carpenter Asia-Pacific Climate Impact Center (GCACIC), a joint initiative of Guy Carpenter & Company, LLC, the leading global risk and reinsurance specialist, and the City University of Hong Kong, has published a report that discusses tropical cyclone activity in the Western North Pacific (WNP) in 2009 and the success of the Center’s earlier predictions for the typhoon season.

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The US property catastrophe reinsurance renewal at January 2010 demonstrated a measurable decline in pricing overall compared with the renewal at 2009. Analysis of the complete January 2010 renewal dataset indicates the US catastrophe RoL index retreated by an average of 10 percent, allowing for the impact of the major prior adjustments to the catastrophe models. A reduction in the ratio of signed to authorized lines from 94 percent to 85 percent is a further sign that capacity is up and a more competitive market has emerged. 

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A massive explosion on February 7 at an under-construction power plant in Middletown, Connecticut, badly damaged the structure and killed five people. Fire officials said the blast occurred during testing at the Kleen Energy Systems facility, which was 95 percent complete and due to come online in the summer as the largest electricity generating plant in the New England region. Reports said the project is covered for property damage and business interruption (BI) losses in a policy shared by several insurers.

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2009 has seen an impressive recovery from last year’s financial crisis and the uncertainty caused by losses from Hurricanes Gustav and Ike. This recovery has been driven by the easing of financial markets and low catastrophe activity. A very quiet hurricane season, coupled with relatively low losses for other weather-related events, meant insured losses reached USD24 billion in 2009 , the lowest figure since 2006 and a significant fall from USD52.5 billion in 2008. Weather-related events continued to be the largest source of losses in 2009 at USD21 billion, while man-made disasters triggered insured losses of USD3 billion. Total losses (both insured and uninsured) reached USD52 billion in 2009. Also, some 12,000 people lost their lives to natural catastrophes and man-made disasters. 

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A massive explosion at an under-construction power plant in Middletown, Connecticut, on February 7 badly damaged the structure and killed at least five people. Fire officials said the blast occurred during testing at the Kleen Energy Systems facility, which was 95% complete and due to come online this summer as the largest electricity generating plant in the New England region. Flames and smoke shot up from the 620-megawatt gas-fired facility when the explosion occurred and windows were blown out by the force of the blast. Some people living up to 30 miles (50 kilometers) away said their homes were shaken by the blast. Reports said parts of the plant were badly damaged and surrounded by debris, but other areas of the structure, its roof and its two smokestacks were still standing. Some nearby houses were also reported to have sustained some structural damage.

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