A new report from Aon Benfield ranks Cascadia in North America among the top five areas where mega-earthquakes of moment magnitude (Mw) 8+ are most likely to occur in the future.
The other regions most at risk are the Caribbean (Lesser Antilles), Chile, Indonesia (Sumatra), and Japan.
Aon Benfield notes that the last mega-earthquake on the Cascadia Subduction Zone occurred 300 years ago, just before the start of historical records for the region, but:
Whilst the short to medium term probability of a mega-earthquake may be low, there is potential for such an event in the future and insurers should not disregard the associated risks to the cities of the Pacific North West region.Ã¢â‚¬
Aon Benfield goes on to say that insurance penetration in terms of earthquake cover runs at around 30 percent for both commercial and residential property in the Pacific North West.
Pricing is competitive and earthquake cover is probably running at half the cost compared to peak earthquake zones such as California, it adds. It estimates that insurance costs for earthquake cover have fallen by around 5 percent over the last two or three years.
Of course Chile has had the most recent experience of a mega-earthquake. The magnitude 8.8 Maule earthquake that struck Chile on February 27, 2010 caused significant damage and loss of life.
On March 10, Swiss Re estimated total insured losses for the insurance sector for the Chile earthquake to be in the range of $4 billion to $7 billion.
Check out I.I.I. earthquake facts and stats.