Earthquake and Hurricane Risk Evaluations in the Caribbean.

Earthquake and Hurricane Risk Evaluations



In 2007, Marubeni, one of Japan’s largest trading conglomerates, purchased a group of electrical generating and distribution facilities in the Caribbean. Spread among the islands of Trinidad, Jamaica, Curaçao and Grand Bahama, the facilities are exposed to significant risk of hurricanes, earthquakes, and storm surge.

Over a two-month period, Thornton Tomasetti visited 11 power plants, examined a portion of nearly 12,000 miles (19,000 kilometers) of transmission lines, and assessed substations, hydroelectric facilities, warehouses and offices. The team interviewed dozens of employees who knew what damage past storms had caused and what retrofits were installed. For each property, the objective was to determine the vulnerability and potential losses from earthquakes, hurricane winds and storm surge.

One of the project’s most challenging aspects was fine-tuning the loss modeling software to account for data input from the engineering field studies and, more appropriately, to account for likely risks. The probable maximum loss the team computed was found by the client to be within the insured limits for the modeled 250-year and 500-year events (those with, respectively, a 0.4 percent and 0.2 percent chance of happening in any year on average).

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