Updating Real-Time Earthquake Loss Estimates: Methods, Problems and Insights

Abstract

This report summarizes the results of a project to reexamine earthquake loss estimation methods in an effort to develop a method for applying Gallup-like statistical procedures to rapidly update earthquake loss estimates. Loss data collected after the 1994 Northridge earthquake from the California governor's Office of Emergency Services (OES) and the California Department of Insurance (CDI) are shown to provide an opportunity and motive to develop a rapid loss updating method. The diversity of criteria for determining losses underscores the complexity of any updating and, more generally, any loss estimation method. A Bayesian method for rapidly updating losses is outlined and tested, based on a 1995 CDI loss database. By examining the Northridge earthquake loss data, the possibility of employing stratification techniques to improve the efficiency of updating methods is explored. Lessons learned and research needs developed from this project are summarized.