Evaluation of Business Interruption Losses in the Capital City of New Zealand

Abstract eng:
Presented in this study is a probabilistic estimation of the seismic risk in the capital city of the New Zealand. The contribution of three factors to the economic losses is discussed. The first factor is the level of seismicity in the Wellington region. The second factor is the significant growth of exposure in the region. The third factor is the location of major access roads and railroads in the region. Earthquake losses are estimated both for a stochastic event set and for a given scenario. The results presented are computed using the Risk Management Solutions recently upgraded earthquake model for the New Zealand. The upgraded model is a probabilistic model that takes into account the uncertainty corresponding to the seismic hazard and the one corresponding to the vulnerability of the building inventory in that region. The hazard component of the model is upgraded using the latest seismic hazard maps released by the New Zealand Institute of Geological and Nuclear Sciences. The vulnerability component of the model is upgraded by implementing a performance-based earthquake engineering methodology. It is found that the business interruption losses in Wellington during a major event have the potential of becoming catastrophic, primarily because of the contribution of the lack of redundancy of the transportation network in that region.

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