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Thursday, January 19, 2012

Strong Earthquake hits South Island of New Zealand

The land of Maori – an island country in the south-western Pacific Ocean comprising two main landmasses (the North Islandand the South Island) and numerous smaller islands known as New Zealand is a calm place and generally does not attract much of International attention.  – but hits headlines due to Earthquakes

The quake known variously as Tremor / temblor etc., is the result of a sudden release of energy in the Earth's crust that creates seismic waves. The  seismic activity of an area refers to the frequency, type and size of earthquakes experienced over a period of time. Earthquakes are measured using observations from seismometers. The moment magnitude is the most common scale on which earthquakes larger than approximately 5 are reported for the entire globe. The more numerous earthquakes smaller than magnitude 5 reported by national seismological observatories are measured mostly on the local magnitude scale, also referred to as the Richter scale.

Today [19th Jan 2011] a few hours ago, a strong earthquake has struck off the coast of New Zealand's South Island; there are no reports of damage or injuries and no tsunami warning has been issued. An earthquake measuring 6.3 on the Richter scale jolted the South Island of New Zealand at 0649 GMT  today 126 miles (203 kilometers) west of New Zealand's southernmost city, Invercargill, at a depth of 11 miles (18 kilometers) says reports. 

Earthquakes in New Zealand occur as the country forms part of the Pacific Ring of Fire, which is geologically active. About 20,000 earthquakes, most of them minor, are recorded each year. About 200 of these are strong enough to be felt. As a result, New Zealand has very stringent building regulations.  The Pacific Ring of Fire  is an area where large numbers of earthquakes and volcanic eruptions occur in the basin of the Pacific Ocean. In a 40,000 km (25,000 mi) horseshoe shape, it is associated with a nearly continuous series of oceanic trenches, volcanic arcs, and volcanic belts and/or plate movements. The Ring of Fire has 452 volcanoes and is home to over 75% of the world's active and dormant volcanoes.

Last year [Feb 2011] at Christchurch,  there was a devastating earthquake with a magnitude 6.3 struck the Canterbury region in New Zealand's South Island at 12:51 pm on Tuesday, 22 February 2011 local time (23:51 21 February UTC.  The earthquake caused widespread damage across Christchurch, especially in the central city and eastern suburbs, with damage exacerbated by buildings and infrastructure already being weakened by the 4 September 2010 earthquake and its aftershocks.  In total, 181 people were killed in the earthquake, making the earthquake the second-deadliest natural disaster recorded in New Zealand (after the 1931 Hawke's Bay earthquake).

New Zealand reportedly is one the Countries with very high insurance penetration.  The total cost of rebuilding to insurers  is estimated to be around NZ$20–30 billion, making it by far New Zealand's costliest natural disaster.   Quoting Global reinsurer Swiss Re, reports suggest that  Insurers look likely to foot 80 per cent of the $20 billion price tag put on the Christchurch earthquakes.   That brings to light the fact of the key role played by Insurers in  post-disaster financing.  The Swiss Re research shows the insurance sector will only cover up to 17 per cent of Japan's March earthquake last year, while a February quake Chile will have about 27 per cent of the US$30 billion in economic losses covered.  Worldwide seismic events between 2010 and 2011 caused economic losses of about US$276 billion and highly earthquake-prone countries remain underinsured, Swiss Re said.

While a loss is bad to everybody, higher insurance penetration is more spreading of losses – a good concept in Insurance

With regards – S. Sampathkumar.

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