Chch Earthquakes Rev 1a - IFAA · Christchurch Earthquakes Lessons Learned & Implications for Insurance Claims How Big of a Surprise Was It ? The Events Intensity of shaking , Multiple

Mark Ellis – Thornton Tomasetti Peter Ziegler – TPA Godfreys

Christchurch Earthquakes

Lessons Learned & Implications for Insurance Claims

How Big of a Surprise Was It ? The Events

Intensity of shaking , Multiple Events Liquefaction

The Damage Settlement / Tilting Residential Buildings, Older Commercial Buildings Newer Commercial Buildings

The Response CBD Closed for more than 1 year Repair/Upgrade Procedures /Requirements in flux Volume, nature and fluidity of claims process

BIG BIG-ish

BIG Not really BIG

BIG BIG-ish BIG-ish

New Zealand Earthquakes

Christchurch, New Zealand

Australian Plate and Pacific Plate converge on the South Island of New Zealand.

Locations of Earthquakes/AfterShocks

Property Loss Consulting

Photo credit information here.


Earthquake Accelerations vs. Code

22 February 2011 Earthquake produced accelerations significantly higher than building (500 year) Code


Acceleration Comparison New Zealand vs. Japan

Christchurch – M6.3

Japan – M9.0

Property Loss Consulting

Christchurch vs. Japan

Liquefaction and Lateral Spreading Property Loss Consulting

Christchurch, New Zealand Photo credit information here.

Settlement / Tilting

> Acceptable limits of settlement are very subjective. > Repair methods are available, although challenging and somewhat unproven: - Piling, jacking, and grout injection.

>  Christchurch, New Zealand

Newer Commercial Buildings

Some collapses: >  CTV, PGG buildings (had been “green-tagged”). Others are very expensive to repair: >  Tilting / re-levelling is expensive and unproven. >  Structure permanently deformed. >  Structural capacity depleted. >  Seismic upgrade required.

Did these buildings meet the intent of the code?

>  Christchurch, New Zealand

Issues Affecting Commercial Buildings >  Plan Irregularities, lack of redundancy. >  Concrete moment frame cracking

patterns, beam elongations. >  Concrete wall cracking patterns

and rebar buckling. >  Precast walls / grouting. >  Precast floor systems. >  Precast Stairs. >  Exterior Precast Panels. >  Settlement / Tilting.






















Commercial Building Example


>  Failure of Concrete Shear wall – resulting in lean across boundary >  Presence of old “plain round bars” makes wall repair challenging. >  Hidden precast panel connection failures >  Basement flooded and Penthouse “whipped” around



>  Failure of Concrete Shear wall – resulting in claimed “twist” >  Severely damaged stairs >  Configuration of walls and temporary stability complicates repair >  Condition of foundations unknown.



>  Small well distributed cracking in well detailed shear walls >  “Gravity structure” damaged by induced building movements >  Tower settled more than podium >  Pounding between adjacent structures

Industrial Facilities

Port of Lyttlelton, New Zealand

>  Substantial damage to local ports and waterfront facilities. >  Additional damage from EQs and aftershocks. >  Need to evaluate proposed remedial design. Separate events. >  Betterment ???

Developments and Changes Occurring >  Royal Commission established. >  CERA – take charge of recovery, including demolition >  Red/Orange/Green zoning of residential >  Re-planning of CBD – 7 story limit? >  Seismic load factor increase – 0.22 to 0.3 >  Evaluation/Repair/Upgrade Procedures being

developed “on the fly” >  City Council will require all buildings to be evaluated >  City Council - seismic retrofit required for buildings

< 33% code, or with fatal flaws. (may be decoupled from repairs, if building is not badly damaged)

Seismic Upgrade Requirement Ex

tent

of S

truct

ural

D

amag

e

Significant Required Now Recommended ?

Minor Required within X years Recommended None

None Required within Y years Recommended None

< 33% NBS (EPB) 33% to 67% NBS >67%NBS

Existing Seismic Capacity

Lessons Learned - Engineering Technical

>  Liquefaction / settlement can be a big problem. >  Irregularities & lack of redundancy are probs. >  Conc. shear wall & moment frame design

inadequate? >  Stairs, panels, non-struct. design inadequate? >  Eval./repair/retrofit procedures need development

Process >  Need to be very flexible >  Need to be very pro-active– help steer process >  Owner and their engineer can really complicate the

claims process. >  Repair vs. Mitigation adds complication

Adjuster Experiences – Roles

>  Examples of insurer taking on adjusting role -  has expectation adjuster will support insurer’s actions -  impacts on co-insurers and re-insurers

>  Now appointing contractors directly to work for insureds >  Engaging builders/surveyors to carry out an adjuster’s

role >  Increasing in-house resource

Adjuster Experiences – Coverage >  Sums Insured - inadequate due to no. of total losses >  Demolition / debris removal costs large due to risk,

location within CBD >  Inflationary increases due to supply and demand,

delays in reconstruction commencing >  Inadequacy of professional fees cover , as professionals

involvement greater than the norm due to ongoing events, potential increased damage requiring further assessments, uncertainty surrounding reinstatement standards and enforceability

>  Policy Sub limits, wording, e.g. “as-new”

City Council Factors >  Has building owner been notified by CCC that it is

required to upgrade pre loss? - Does this constitute “notification” under the policy?

>  Does CCC have the authority to enforce the increased target level for EPB?

- If it does what are the additional costs and are they recoverable under the policy? - Is the sum insured sufficient if these costs are significant?

Currently, there are differing views from insurers as to whether the CCC has the authority.

Other Insurance Challenges >  An insurer dealing in the domestic arena is reputed to

have in the region of 1800 dwellings ready for reinstatement works to be completed. It is unable to purchase CAR insurance, so no works have commenced.

>  The ground continues to move and settle. Further damage occurs and costs will increase.

>  When is an appropriate time to reinstate? >  How does this relate to due despatch requirement

under the policy?

Other Insurance Challenges

>  Some Insurers are no longer offering earthquake insurance. Others are offering at increased rates with large deductibles.

>  There is no certainty of future earthquake insurance availability.

Practical Challenges

>  Lack of suitably qualified adjusting resource in NZ, generally accepted UK Chartered Loss Adjusters have requisite skills and blend well

>  Most ‘Cat’ adjusters attend for finite periods, up to say 3 months. This has now been operating for over 13 months. This brings its own unique challenges.

>  ‘Cat’ costs are significant involving numerous events, airfares, accommodation, transportation etc.

The Future in NZ

>  Adjusters handling larger valued losses

>  Claims handlers handling larger valued losses

>  Will be likely that overseas adjusters will want to settle in NZ

>  More experienced adjusters in NZ, more future competition

>  Insurers handling claims differently as above

Implications for other Events/Locations?

>  Engineering

>  Adjusting

Documents

Chch Earthquakes Rev 1a - IFAA · Christchurch Earthquakes Lessons Learned & Implications for Insurance Claims How Big of a Surprise Was It ? The Events Intensity of shaking , Multiple