Probabilistic Seismic Risk Assessment in Manizales, Colombia: Quantifying Losses for Insurance Purposes

Int J Disaster Risk Sci (2017) 8:296–307 www.ijdrs.com DOI 10.1007/s13753-017-0137-6 www.springer.com/13753 ARTICLE Probabilistic Seismic Risk Assessment in Manizales, Colombia: Quantifying Losses for Insurance Purposes Mario A. Salgado-Gálvez1 · Gabriel A. Bernal2 · Daniela Zuloaga2 · Mabel C. Marulanda1 · Omar-Darío Cardona3 · Sebastián Henao4 Published online: 6 September 2017 © The Author(s) 2017. This article is an open access publication Abstract A fully probabilistic seismic risk assessment was In the case of the buildings, the results were used in the developed in Manizales, Colombia, considering assets of update of the technical premium values of the existing different types. The first type includes elements that are collective insurance scheme. part of the water and sewage network, and the second type includes public and private buildings. This assessment Keywords CAPRA · Earthquake insurance · Manizales required the development of a probabilistic seismic hazard (Colombia) · Probabilistic seismic risk assessment · Risk analysis that accounts for the dynamic soil response, retention and transfer assembling high resolution exposure databases, and the development of damage models for different types of elements. The economic appraisal of the exposed assets was 1 Introduction developed together with specialists of the water utilities company of Manizales and the city administration. The risk Manizales is a city of about 400,000 inhabitants located in assessment was performed using several Comprehensive the Colombian Andes. Similarly to other cities in the Approach to Probabilistic Risk Assessment modules as region, Manizales has a building portfolio that is mainly well as the R-System, obtaining results in terms of tradi- comprised of low and middle-rise masonry and reinforced tional metrics such as loss exceedance curve, average concrete residential, commercial, and administrative units. annual loss, and probable maximum loss. For the case of As a consequence of being located in a region prone to pipelines, repair rates were also estimated. The results for hazards with different origins (for example, landslides, the water and sewage network were used in activities floods, and volcanic ash fall are common in the city, and related to the expansion and maintenance strategies, as well the Colombian Andes are prone to earthquakes), a com- as for the exploration of financial retention and transfer prehensive set of disaster risk management and reduction alternatives using insurance schemes based on technical, activities have been continuously developed during the past probabilistic, and prospective damage and loss estimations. 10 years. These actions have had remarkable achievements in terms of corrective and prospective interventions, which range from the structural retrofitting of hospitals to the & Mario A. Salgado-Ga´lvez design and implementation of a voluntary and collective [email protected] risk transfer scheme using innovative earthquake insurance 1 Centre Internacional de Metodes Numerics en Enginyeria approaches (Marulanda 2013; Marulanda et al. (CIMNE), 08034 Barcelona, Spain 2014, 2016). 2 INGENIAR Ltda., Bogota´, D.C. 110221, Colombia As part of these disaster risk management and reduction activities that have taken place in the city, a multidisci- 3 Instituto de Estudios Ambientales (IDEA), Universidad Nacional de Colombia Sede Manizales, Manizales 170004, plinary and multi-sectorial disaster risk management and Colombia reduction project was developed for the city.1 Among its 4 Universidad Nacional de Colombia Sede Manizales, Manizales 170004, Colombia 1 http://www.gestiondelriesgomanizales.com. 123 Int J Disaster Risk Sci 297 different activities, a fully probabilistic seismic risk results, instead of using solely the opinion of experts. The assessment was developed for all elements of the water and results constitute a starting point not only for future updates sewage network owned and operated by Waters of of the assessment (accounting for changes in the exposure Manizales S.A. E.S.P. (Aguas de Manizales S.A. E.S.P.), characteristics, for example, larger number of buildings, and also for the portfolio of public and private buildings water and sewage network elements with different char- within the city limits. The aim of the assessment was to acteristics, and better understanding of the seismic hazard estimate the order of magnitude of potential damages and in the area under analysis), but for a later integration of losses due to earthquakes, and use these results in the damages and losses associated to other types of hazards design of an earthquake insurance policy for the water and that can be aggregated using approaches like the one pro- sewage network, as well as in the update of the existing posed by Ordaz (2014). voluntary and collective insurance scheme of the buildings This case study provides an example of how scientific, in the city. This is the first time a fully probabilistic seismic engineering, and financial activities can be combined in risk assessment has been performed for water and sewage order to develop comprehensive disaster risk management networks in Colombia, although similar assessments have activities converting the results into a technical basis for been previously performed in other parts of the world the design and implementation of earthquake insurance (Taleb-Agha 1977; Eguchi 1991; Isoyama et al. 1998; schemes in the city of Manizales. Ballantyne et al. 1999; Pitilakis et al. 2006). With respect to the building portfolio, this assessment constitutes an update, bearing in mind that similar studies have been 2 Methodology and Input Data developed using the same methodological framework in other urban centers such as Bogota´ D.C., Medellıń, Bar- This assessment made use of the recently updated local celona, and Lorca (Marulanda et al. 2013; Salgado-Ga´lvez seismic hazard model at bedrock level considering the local et al. 2013, 2014a, b, 2016c). site effects (Bernal et al. 2015, 2017; Salgado-Ga´lvez et al. Because a number of uncertainties related to seismic 2016b). Additionally, detailed and high-resolution expo- hazard and physical vulnerability exist, it has been widely sure databases were developed for the water and sewage acknowledged that probabilistic approaches and method- and building portfolios—in the case of buildings, individ- ological frameworks are required when assessing, in a ual structural characteristics (that is, age, number of stories, prospective way, feasible future losses (McGuire 2004; and construction material) were recorded for each entry, Grossi and Kunreuther 2005; UNISDR 2013; GFDRR whereas in the case of the water and sewage network, 2014). These probabilistic approaches are intended to not characteristics for each segment of the pipelines (that is, only identify the uncertainties but, when possible, quantify material, diameter, and joint type, among others) were and rigorously propagate them throughout the whole assigned. In addition to buried pipelines, other elements analysis process. Recently, different open-source tools and such as water storage tanks and administrative buildings initiatives to perform these evaluations have been devel- were also considered; for these, parameters such as age and oped, with the primary objective of providing access to construction material were also taken into account. After these tools to developing countries. A widely used and identifying the structural characteristics of each element recognized tool is CAPRA—Comprehensive Approach to included in both exposure databases, a set of vulnerability Probabilistic Risk Assessment (Cardona et al. 2012). functions was developed in terms of different seismic For the building stock, the probabilistic risk assessment hazard intensity measures (for example, spectral accelera- was performed with the R System (ERN 2014), a propri- tion, and peak ground velocity), to be assigned later to each etary tool that implements the fully probabilistic and event- element. Then the convolution between hazard and vul- based loss assessment methodology proposed by Ordaz nerability was performed using the CAPRA-GIS program (2000). The results from this assessment were used for the (ERN-AL 2011) to obtain the loss exceedance curve update of the technical premium values used for the (LEC), from which other probabilistic risk metrics such as insurance of the complete portfolio of public buildings of average annual loss (AAL) and probable maximum loss Manizales (using one collective policy), as well as for the (PML) can be obtained. For the buried pipelines, average premium values of the voluntary and collective insurance annual repair rates (by km) were also estimated. scheme for the private buildings of the city. In the case of The development of a fully probabilistic seismic risk the water and sewage network, the results were used to analysis usually requires the completion of a set of activ- identify appropriate materials to be used in the expansion ities that provide input data. Among them, the following and maintenance activities of the water and sewage com- can be identified: (1) a probabilistic seismic hazard analysis pany, as well as to serve as a base for the negotiation of an in which events with different characteristics such as earthquake insurance policy based in sound technical location, magnitude, and occurrence frequency are 123 298 Salgado-Ga´lvez et al. Seismic Risk in Manizales: Quantifying Losses for Insurance Purposes modelled, together with the geographical distribution

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