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Resilience is in our hand

In 2009 you wrote Peace of mind in earthquake country (together with Peter Yanev), which is considered “the bible about earthquake risks”. Why do you think it was so well received by the non-expert public? And based on that experience, how communication should change in order to facilitate a global “understanding of risk” (as suggested in the recent Sendai Framework 2015)? We wrote the book for non-technical people, following the lead from Peter’s 1974 First Edition. We tried to demystify earthquake engineering and make it tangible for everyone. The key is that there are really simple things that can be done to reduce risk, and we wanted to get that message across. In my mind, the key to achieving a ‘global understanding of risk’ is to use consistent simple language across industries, from policy to insurance to engineering – GEM could be a leader in establishing this common terminology.

 

Often developing countries are lagging behind in the process of making their environment safer. To which extent are innovation, sustainability, and open source technology keywords to empower resilience in the most vulnerable regions? Risk for developing countries is usually understood and communicated at the regional level, rather than at the building-specific level. We have to get knowledge about individual risks into the hands of people that can do something about it.

 

Regional planning and policy can only go so far. This is a great opportunity for GEM. Through technology and open source tools we are now better able to capture and communicate site-specific information, empowering the owners of that risk. This will drive resilience which will drive sustainability – what is the carbon footprint of a major earthquake? The positive cycle of encouraging insurance coverage for buildings in order to spread the risk and make premiums more affordable often disregards incentives to take measures for loss prevention.

 

How do you think insurance schemes should address the issue of prevention?This touches on one of the greatest opportunities in earthquake risk reduction. Earthquake insurance is generally priced on the mean, with significant cross-subsidization. The good risks pay for the bad, and there is little incentive for improvement at the building level. (If home prices were based on the neighborhood mean, the incentives to put in that new kitchen would certainly change!).

 

Again, this is a great opportunity for GEM. If we can connect risk at the building scale to portfolio exposure and therefore insurance pricing, we can create financial incentives for resilience. Retrofitting costs are unaffordable in many countries of the world. Which can be the solution for this problem? Can open data in some way ease this process?Open data, at the building-level scale, will empower people to do something. Data on the overall risk at the regional level helps, but we really need to find a way to inform people as to their risk, not the average risk profile for their city.

 

Business continuity is crucial in the post-earthquake phase and securing your buildings and installations is critical. Can you give me a measure of the cost-benefit ratio of retrofitting a working environment? The opportunity here is to balance business continuity costs with insurance and real estate costs. It makes no sense to view these disciplines in isolation, although this is often the case. Business continuity and insurance costs should reflect more resilient construction and this reduction in costs should incentivize better real estate standards. Looking at these disciplines together, I have rarely seen payback periods greater than 3 years for major retrofit or resilient design enhancements. How do you think private sector, and specifically engineering companies like ARUP, can play a role in risk reduction? Engineering companies typically understand risk at the building-scale.

 

Modeling and insurance companies typically understand risk at the portfolio scale. Engineers need to get better at portfolio analysis to have greater impact (and insurers need to get better at building analysis) and Arup is heading in that direction. In 2013 ARUP was the first engineering firm to join GEM. Can you make a round-up of the past 2 years of collaboration?It has been a fantastic opportunity for Arup to be a supporter of GEM, and for me personally to be involved in such an important effort. What I mentioned in 2013 still holds, “by combining our global engineering expertise with seismological and financial aspects of the model, we will help quantify the benefits of risk mitigation, help create financial incentives for earthquake resiliency and thus save lives”.

 

How can the engineering sector benefit from open source software like the OpenQuake-Engine or specific tools destined to structural assessment, retrofitting and reconstruction?GEM can help the engineering sector perform portfolio analysis based on their detailed understanding of earthquake risk at the building scale. This will incentivize risk-differentiated insurance pricing, which will incentive resilience. Andrew Thompson ran the Global Catastrophe Risk & Insurance practice at Arup, and represented Arup on the governing board of GEM from 2013 - 2015. He recently left Arup to start a technology company that quantifies earthquake risk at the building scale to help insurers better manage their portfolio exposure. Andrew holds a master’s degree in structural engineering from the University of California, Berkeley.

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