The re/insurance industry needs to be aware that the earthquake risks in the Asia-Pacific region are considerably more complex than some appreciate, particularly in regions seen as having low seismic risk.

Chesley Williams, senior director, product management, at Moody’s RMS, told SIRC Today that even in low hazard regions, earthquakes can be more difficult to estimate in terms of severity and timing. It is therefore important for risk managers to properly assess the true level of risk.

In regions of high seismic activity, work has been done to mitigate the risks. Tokyo, for example, which was hit by a devastating earthquake almost exactly a century ago, is now better prepared. Its recently constructed buildings, for example, have been designed and built to cope with large magnitude earthquakes.

According to Williams, a magnitude 7.9 earthquake, like the 1923 Great Kanto earthquake which hit Tokyo, would today cause up to ¥157 trillion ($1.05 trillion) in economic property damage, even with the new building codes in place.

However, she added, cities in low seismic risk areas, such as Shanghai, still represent a potential big loss because there is a mix of old and new buildings. Many are more vulnerable to earth tremors as they were not built to modern seismic building codes.

According to Williams, a great deal has been learned over the past several decades about how to build more earthquake-resilient buildings. The results of these lessons have been incorporated into modern buildings—but not older ones.

She added that a number of areas not seen as being generally prone to earthquakes, such as Busan in South Korea, could be at risk. The length of time between events like earthquakes across Asia can vary considerably, with long periods between some major episodes.

As a result, she said, it is important for earthquake models to be as comprehensive as possible to properly assess the level of risk across all regions of Asia.

RMS has revised its suite of earthquake models for Asia to take account of the latest developments in earthquake-related science and building codes.