2015 Nepal Earthquake Event Recap Report - Aon Benfield

Aon Benfield Analy tics | Impact Forecasting

2015 Nepal Earthquake Event Recap Report September 2015

Risk. Reinsurance. Human Resources.


Table of Contents Executive Summary

3

Introduction

4

Seismological Recap

5

Human Casualty

9

Property Effects

10

Commercial Effects

13

Utility Effects

15

Infrastructure Effects

15

Impact Forecasting Reconnaissance

16

Impact Forecasting: Real-Time Response

26

Financial Losses

29

Appendix A

34

Appendix B

35

Appendix C

37

Contact Information

38

2015 Nepal Earthquake Event Recap Report

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Executive Summary A major magnitude-7.8 earthquake struck central Nepal on April 25, 2015, leaving catastrophic impacts across the country. It was the largest earthquake to strike Nepal in over 80 years. That tremor, plus subsequent aftershocks, left more than 9,100 people dead and nearly 25,000 others injured. Extensive damage was recorded throughout Nepal, particularly in the capital city of Kathmandu. The main jolt was later followed by a major magnitude-7.3 aftershock on May 12, 2015. Ground shaking from the first earthquake lasted for two minutes according to local reports and was felt as far away as New Delhi in India, Lahore in Pakistan, Lhasa in Tibet, and Dhaka in Bangladesh. Minimally 379 aftershocks rattled Nepal and the surrounding region with magnitudes 4.0 or greater in the months after the event, including five which registered above magnitude-6.0. Extensive catastrophic damage to property was reported throughout central Nepal, including in Kathmandu and throughout the Kathmandu Valley. Hundreds of thousands of buildings collapsed across many parts of Nepal as a result of the earthquakes, and the combined total of houses destroyed stood at 605,254. A further 288,255 were partially destroyed. Tens of thousands of other structures, including schools, health facilities and public government buildings, were also impacted. Additional damage to thousands of structures was reported in parts of India, Tibet, and Bangladesh. Several important historical buildings collapsed or sustained severe damage in Kathmandu and in the surrounding area including monuments that comprised the United Nations Educational, Scientific, and Cultural Organization’s (UNESCO) cultural heritage site of the Kathmandu Valley. More than 30 monuments in the Kathmandu Valley collapsed, and an additional 120 incurred partial damage. Nationwide, more than 1,000 monasteries, temples, historic houses, and shrines were impacted. Nepal’s state utility provider, Nepal Electricity Authority (NEA) reported that 16 hydropower facilities – out of 23 that were operational – were significantly damaged (one of which was under construction at the time of the temblor). Collectively, the shutdowns resulted in a loss of 150 megawatts from Nepal’s power grid which represents approximately one-fifth of the country’s total power supply. The road and highway network across Nepal was heavily impacted, with more than 2,000 kilometers (1,242 miles) – or 13 percent of the network – damaged or destroyed. Worst affected were the districts of Sindhupalchowk, Dolakha, and Nuwakot. Impact Forecasting sent a team of seismological and engineering experts to survey the damage in Nepal. The main building typologies in Nepal are adobe structures, brick or stone masonry with mud mortar (BM/SM), brick or stone masonry with cement mortar (BC/SC), wooden structures (W), and reinforced concrete (RC) buildings. Impact Forecasting was able to determine how the differing building types and structures performed. This analysis was critical as we work to further improve the earthquake scenario model that we have developed for Nepal. The model is to be used as a tool for companies and clients to further analyze their earthquake hazard risks and exposures in the country. The overall economic cost of the Nepal earthquake(s) – including damage in Nepal, India, Tibet and Bangladesh – is estimated around USD8.0 billion. A World Bank assessment tentatively listed total economic damage solely in Nepal at USD5.1 billion and valued additional economic losses (including business interruption and specific sector losses) at nearly USD1.9 billion. This value is equivalent to more than one-third of Nepal’s entire Gross Domestic Product (GDP). Overall insured losses in Nepal, India, Tibet and Bangladesh were estimated around USD200 million. As of August 2015, the Nepal Insurance Board (IB) reported that 16,603 claims were filed to the 17 non-life insurance companies operating in the country with a total value of NPR18.43 billion (USD175 million). The agency expected total non-life claims to settle around NPR20 billion (USD190 million).


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Introduction A major magnitude-7.8 earthquake struck central Nepal on April 25, 2015, leaving catastrophic impacts across the country. It was the largest earthquake to strike Nepal in over 80 years. That tremor, plus subsequent aftershocks, left more than 9,100 people dead and nearly 25,000 others injured. Extensive damage was recorded throughout Nepal, particularly in the capital city of Kathmandu. The main jolt was later followed by a magnitude-7.3 aftershock on May 12, 2015.

Epicenter of April 25, 2015 M7.8 event (Source: USGS)

The combined death toll from both tremors stood at 8,891 and the number of injured was 22,302 in Nepal alone. A further 229 fatalities were registered in India, Bangladesh, China’s Tibet, and Mount Everest.

The first earthquake struck at 11:56 AM local time (06:11 UTC) with an epicenter located 77 kilometers (48 miles) northwest of Kathmandu at a shallow depth of 15.0 kilometers (9.3 miles). The second earthquake struck at 12:50 PM local time (07:05 UTC) with a shallow epicenter located 18 kilometers (11 miles) southeast of Kodari, on the southwestern flanks of Mount Everest, also at a depth of 15.0 kilometers (9.3 miles). Ground shaking from the first earthquake lasted for two minutes according to local reports and was felt as far away as New Delhi in India, Lahore in Pakistan, Lhasa in Tibet, and Dhaka in Bangladesh. Minimally 379 aftershocks rattled Nepal and the surrounding region with magnitudes 4.0 or greater in the months after the event, including five which registered above magnitude-6.0. The European Space Agency’s satellite Sentinel-1A used imagery obtained before and after the earthquake to determine that the maximum land deformation occurred only 17 kilometers (11 miles) from Kathmandu which explained the catastrophic levels of damage experienced in that area. The earthquake’s slip – defined by the United States Geological Survey (USGS) as relative displacement of formerly adjacent points on opposite sides of a fault, measured on the fault surface – occurred over an area roughly 2,600 to 5,200 square kilometers (1,000 to 2,000 square miles) across a zone that included the cities of Kathmandu and Pokhara in one direction and nearly the entire Himalaya mountain width in the other. It is estimated that as much as 3.0 meters (10 feet) of northern India’s Bihar state slid beneath Nepal in a matter of seconds.


Plot of M6.0+ earthquakes following main April 25 event in blue (Source: USGS)

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Seismological Recap The active collision of the Indian tectonic plate with its Eurasian counterpart is the driving force for tectonic activity in the Himalayan region. The subduction of the Indian plate beneath the Eurasian plate at a rate of 40-50 millimeters per year has produced an active fault system that extends from the Karakoram Ridge in the west to the Bengal Plain in the east. It comprises several major faults including the Himalayan Frontal Thrust (HFT), the Main Boundary Thrust (MBT), and the Main Central Thrust (MCT) (Figure 1). These active boundaries are located within Nepal and are the primary source of earthquakes in the country.

Figure 1: Active faults in and around Nepal (Nakata and Kumahara 2002)

Seismic Hazard The geographical location of Nepal naturally makes it one of the most seismically hazardous regions in the world. Nepal resides on the boundary of the Indian and Eurasian plates and numerous active faults have been identified in the Himalayan region. Several significant earthquakes (Mw > 7.5) have occurred in the past 500 years, including the Mw7.8 Kangara earthquake in 1905 and the Mw8.1 Nepal-Bihar earthquake in 1934 (Bilham and Ambraseys 2005). The complexity and uniqueness of the tectonic setting has attracted the attention of several researchers from across the globe. As a result, there is a wealth of knowledge available related to tectonic settings, seismic sources, and seismicity of the Himalayan region. However, the lack of observations of ground motion from earthquakes has been a major setback, especially for the quantification of seismic hazard. The global scientific community has yet to develop robust ground motion predictive models specific to this region. Despite that, hazard studies have progressed and Ram and Guoxin (2013) have developed a hazard map for Nepal for different return periods. Figure 2 shows peak ground acceleration (PGA) maps for 475 and 2,475 years return periods. The hazard maps show larger hazards in the far-western and eastern portions of Nepal, and lower hazards in southern Nepal. The estimated PGA values are in the range of 0.21-0.62 g, and 0.38-1.1 g for 475 and 2,475 years return periods respectively.


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475 years return period hazard

2,475 years return period hazard

Figure 2: Seismic hazard maps of Nepal showing the peak ground acceleration distribution at bedrock level (Ram and Guoxin 2013)

2015 Nepal Earthquake Sequence On April 25, 2015, a magnitude Mw 7.8 earthquake struck the Kathmandu region. It was the strongest earthquake to occur in the region since the 1934 Nepal-Bihar earthquake. The epicenter (latitude 28.24°N, longitude 84.75°E) of the earthquake was 77 kilometers northwest of Kathmandu at a depth of approximately 15 kilometers. The tremor resulted in extensive loss of life and damage to properties. The earthquake occurred on the subduction boundary between the Indian and Eurasian plates. Neither the location nor the magnitude of the event was a surprise to the scientific community. Scientists have been forecasting a potential major earthquake occurring in the hypothesized ”seismic central gap”. The term “seismic central gap” defines an un-ruptured part of the Himalayan Arc which was a 500-800 kilometer unbroken segment of the fault zone between the 1905 Kangra and 1934 Nepal-Bihar earthquake rupture zones (Figure 3). The segment has neither ruptured in historic time nor in the recent past and is therefore referred to as the ”seismic central gap” (Rajendran and Rajendran 2005). Although there have been a few earthquakes in the gap (including the 1803 Uttar Pradesh earthquake, the 1991 Uttarkashi earthquake, and the 1999 Chamoli earthquake (Figure 3)), their magnitudes were relatively small. Hence, they were not deemed to be “gap filling” events. The April 25 earthquake was located in the eastern segment of the central seismic gap. In the days following the earthquake, numerous aftershocks were registered across Nepal, many of which were Mw > 5, including an Mw 7.3 earthquake and Mw 6.7 earthquake. Both events occurred on May 12, 2015, about 150 kilometers east of the main shock on April 25. Hence, questions remain as to whether the May 12 events were technically considered to be “aftershocks” of the April 25 temblor. These “aftershocks” caused additional damage to rural towns and villages in the northern part of Central Nepal. It is important to highlight that the seismic central gap still remains a potential source for a major earthquake. According to researchers, the seismic potential of the seismic central gap is Mw 8.5. During the April 25 tremor, the eastern segment ruptured (about 250 kilometers) but the western segment remains unbroken and still has potential for a major rupture.


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Figure 3: The figure contains the following information: (i) Locations of past events (pink and blue circles) (ii) The seismic central gap(area between blue circles) (iii) Locations of April 25 Gorkha earthquake (green star), May 12 aftershock (green star) and aftershocks Mw> 5 between April 25 to July 5 (yellow circles).(Source: http://www.seismonepal.gov.np/).

Geological Features of Kathmandu Valley The manner in which the ground responds to an earthquake is a result of the earthquake rupture process, the path that transfers energy between the source and the surface, and the response of the shallow materials below the ground surface. In addition, the topography of the site and the geological irregularities produced by a basin could induce significant changes in the ground shaking. The region is defined by a geological feature where considerable thicknesses of sediments have deposited over the bedrock for a long geological time period. These deposits are geologically younger than the underlying bedrock. Such compositional/structural differences influence (amplify) the ground motion characteristics of earthquakes. Kathmandu is located on a basin which is filled with Quaternary fluvio-lacustrine sediments that are more than 600 meters thick (Figure 4). It is important to highlight that the geometry of the Kathmandu basin is similar to the Mexico City basin which amplified the ground motion during the 1985 Michoacán earthquake, resulting in an enormous death toll (more than 30,000) and vast damage in Mexico City. The observed ground motion, as well as the pattern of damage in the Kathmandu Valley, indicates that the presence of the basin significantly modified the ground motion. A seismic microzonation study in Kathmandu, conducted by Paudyal et al. (2012), indicated that the dominant period in the valley ranges between 1-2 seconds. Therefore, the ground would carry significantly stronger energy with period between 1 and 2 seconds due to the resonance effect. Hence, buildings whose frequencies coincide with the resonance frequencies of the valley would be s ubjected to stronger earthquake forces. From our field survey, we observed that the tall buildings (above 10 stories), whose resonance period is between 1 and 2 seconds, responded to the earthquakes strongly (more damage) compared to the lower height engineered buildings in the vicinity. In Figure 5, records of the USGS KATNP station from the main earthquake and aftershock are plotted. The ground motion records display the typical features of a basin such as longer shaking duration and long period waves.


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Figure 4: Cross section map of the Kathmandu Valley and a schematic geological cross-section along N-S (after Sakai, 2001)

Figure 5: (A) Recorded accelerograms at the USGS KATNP recording station for the Mw7.8 mainshock. (B) Recorded accelerograms at KATNP for the Mw7.3 aftershock (Goda et al. 2015).


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Human Casualty The overall aggregated death toll from the April 25 and May 12 events was estimated at 9,126, though hundreds remain officially listed as missing but are presumed dead. The exact figure may never be known, but it is expected to be between 9,500 and 10,000. The April 25 earthquake caused tremendous loss of life in Nepal. Prior to the May 12 aftershock, the death toll minimally stood at 8,674: 8,510 in Nepal and 164 in other countries (India, China, Bangladesh, and Mount Everest). The May 12 aftershock struck prior to the completion of search and rescue operations relating to the initial earthquake in Nepal meaning it was very challenging to quantify the exact number of casualties resulting from each individual temblor. It is estimated that an additional ~400 fatalities occurred in Nepal from the May 12 event, plus an additional 65 in neighboring countries and territories. The combined total death toll in Nepal stood at 8,891, with the breakdown including: 3,969 male fatalities, 4,916 female, and six whose gender was unidentifiable. The number of injured was 22,302. A further 375 were still officially listed as missing. The fatalities in Nepal were concentrated in the districts of Sindhupalchowk (3,557), Kathmandu (1,233), and Nuwakot (1,109). The injured parties were largely concentrated in the districts of Kathmandu (7,950), Lalitpur (3,051), and Bhaktapur (2,101). A total of 62 of Nepal’s 75 districts suffered human casualties as a result of the earthquakes. The total numbers of fatalities and injured parties in Nepal are broken down by district in Appendix B. In India, of the 200+ fatalities reported there, the majority occurred in Bihar state. Additional casualties were reported in Uttar Pradesh, West Bengal, and Rajasthan. Bangladesh’s fatalities occurred in Dhaka, Pabna, Bogra, and Tangile.

Total fatalities by district (Source: NDRR & Impact Forecasting)


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Property Effects Residential Extensive catastrophic damage to property was reported throughout central Nepal, including in Kathmandu and throughout the Kathmandu Valley. Hundreds of thousands of buildings collapsed throughout Nepal as a result of the earthquakes, and the combined total of houses destroyed stood at 605,254. A further 288,255 were partially destroyed. A 2011 report from Nepal’s Central Bureau of Statistics revealed that almost 42 percent of houses had outer walls constructed of brick or stone masonry with mud mortar, almost 29 percent had walls constructed from brick or stone masonry with cement mortar, one-fifth had bamboo walls, and the remaining 5 percent had walls comprised of wooden planks. However, nearly 10 percent of homes in Nepal had reinforced cement concrete pillar foundations. This figure rose to more than 28 percent when only urban areas were taken into consideration. Buildings with reinforced cement concrete foundations and structures have a more rigid composition and are therefore more resistant to the forces applied when earthquakes occur. Building collapses in Kathmandu were largely confined to unreinforced masonry and brick structures in the city’s historic area, rather than modern buildings. The same 2011 census report indicated that there were roughly 4.63 million homes in Nepal. Given the nearly 894,000 residential and government homes that were damaged or destroyed, that means that approximately 1-in-5 homes were impacted by the April 12 and May 25 tremors. The district of Dhading suffered the largest number of homes destroyed with 81,406. Nuwakot was second with a total of 75,577 homes destroyed, then Sindhupalchowk followed with 64,595. Kathmandu was the district with the largest number of homes damaged at 56,301 followed by Kavrepalanchowk (23,745), and Makawanpur (17,560). Fewer homes were destroyed (43,587) than damaged in Kathmandu which is perhaps not surprising given that it is the district containing Nepal’s largest urban center – Kathmandu City. Most of the damage from the May 12 temblor was sustained in villages and towns to the east of Kathmandu. The village of Sankhu was flattened according to relief workers in the area. The temblor triggered landslides throughout the mountainous regions of the country including at least three major slides in Sindhupalchowk district. A full list housing impacts in Nepal is found in Appendix C, and is seen in graphics on the next page. In India, thousands of homes were believed to have sustained damage during the earthquake though the government had yet to release a detailed report. However, varying level of structural, infrastructure and agricultural damage was noted in the following states and cities: -

Bihar: Patna district, Samastipur, Bhagalpur district, Bhita, Supual, Darbhanga, Muzaffarpur, Gopalganj Uttar Pradesh: Kanpur, Lucknow, Allahabad, Agra, Varanashi, Jhansi, Sonebhadra, Gorakhpur West Bengal: Kolkata, Lake Town, Salt Lake, Dalhousie, Darjeeling/Siliguri, Telipara, Purulia, Bankura, Burdwan, East Midnapore, Nadia district Other Cities: New Delhi, Noida, Chandigarh, Jaipur, Barmer, Dumka, Pakur, Sahibganj, Rishikesh, Ahmedabad, Ranchi, Jamshedpur, Bhubaneswar, Visakhapatnam, Srikakulam, East Godavari districts, Kochi, Nagpur and Jabalpur, Jafar Nagar, Jaripatka, Bhopal, Gwalior, Mandla, Hoshangabad, Sidhi, Indore, Chhindwara, Shahdol

China’s Ministry of Civil Affairs reported that 2,699 homes and one temple collapsed in Tibet, while a further 37,244 homes, 209 monasteries, and 66 communications base stations sustained damage. In Bangladesh, hundreds of other homes and structures were damaged.


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Source: Nepal Disaster Risk Reduction Portal & Impact Forecasting


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Educational A total of 8,308 schools – or 42 percent – of Nepal’s schools were affected by the earthquakes. This resulted in 47,557 of the country’s 216,810 classrooms being damaged or destroyed. The specific breakdown included: 19,708 classrooms being destroyed (9.1 percent), 11,046 classrooms sustaining major damage (5.1 percent), and 16,803 classrooms sustaining minor damage (7.8 percent). The worst affected districts were Sindhupalchowk, Lalitpur, Dolakha, and Gorkha. In Sindhupalchowk, 98 percent of all schools were damaged or destroyed, and 99 percent of all classrooms were impacted. A total of 546 schools and 76,422 students were affected. In Lalitpur, a total of 31,822 students and 189 schools were affected. Almost one-third of classrooms were destroyed or partially damaged while 100 of the unaffected schools were used as emergency shelters. In Dolakha, more than two-thirds of classrooms at 362 schools were destroyed or sustained major damage while 522 schools that were unaffected by the earthquakes were used as shelters. In Gorkha, only 7 percent of classrooms withstood the earthquakes with no damage while more than 85 percent of classrooms were completely destroyed. Approximately 68,210 students and 475 schools were affected.

Medical Throughout Nepal, a total of 963 public health facilities were destroyed (503) or damaged (460) during the earthquakes. Among the damaged facilities were 374 health posts, 12 primary health care (PHC) centers, and six hospitals. An additional 130 birthing centers were also destroyed. A further 531 public health facilities and 102 birthing centers were partially damaged. A list of destroyed, damaged, and unaffected healthcare facilities by district is given in the table below.

District

Hospital

Sindhupalchow k Gorkha Dolakha Dhading Kavrepalanchow k Nuw akot Sindhuli Ramechhap Rasuw a Bhaktapur Lalitpur Makw anpur Okhaldhunga Kathmandu

1 1

Destroyed PHC Center 1 1 2 1 1

1 1 1 1

1 1

1 1

Health Post 63 36 47 29 12 30 15 23 14 3 9 18 7 7

Hospital

2 1

1

2

Dam aged PHC Center 2 3 1 1 1 2 2 2 2 1 1 7

Health Post 9 22 6 10 1 14 23 23 3 14 18 12 47 38

Unaffected Hospital PHC Health Center Post 6 10 2 10 76 2 22 18 6 1 2 1 5

2 2

11 12 14

Table 1: Impacted medical facilities in Nepal (Source: Nepal Disaster Risk Reduction Portal)

Nepal’s Ministry of Health and Population disbursed NPR67 million (USD644,000) to various public and private health organizations for responding to the disaster.


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Commercial Effects Tourism Several important historical buildings collapsed or sustained severe damage in Kathmandu and in the surrounding area including monuments that comprised the United Nations Educational, Scientific, and Cultural Organization’s (UNESCO) cultural heritage site of the Kathmandu Valley. According to UNESCO, more than 30 monuments in the Kathmandu Valley collapsed, and an additional 120 incurred partial damage. Nationwide, more than 1,000 monasteries, temples, historic houses, and shrines were damaged or destroyed. The total repair cost was estimated at USD160 million, but the indirect economic cost from loss of tourism was significantly higher. The Kathmandu Valley UNESCO site comprised seven monument zones in Kathmandu and the nearby towns of Bhaktapur and Changunarayan: the Durbar Squares of Hanuman Dhoka (Kathmandu), Patan, and Bhaktapur; the Buddhist stupas of Nau Talle Durbar, Right: before, Left: after (Source: ICIMOD) Swayanbhu and Bauddhanath; and the Hindu temples of Pashupati and Changu Narayan. Following the first earthquake, UNESCO quickly announced that three of those monument zones - the Durbar Squares at Kathmandu, Patan, and Bhaktapur - were almost fully destroyed as they suffered “extensive and irreversible damage”. Some buildings in the affected monument zones dated back to the 15th century. Several of the monuments in Hanuman Dhoka Durbar Square collapsed following the earthquakes, including: Maju Dega Temple, Trailokyamohan Narayan Temple, Kamdev Temple, Kasthamandap, Narayan Vishnu Temple, Radhakrishna Temple, and Kakeshwar Temple. Several other monuments sustained damage, including: Gaddi Durbar Palace (Gaddi Baithak), Nau Talle Durbar (Basantabur Durbar), Great (Old) Drums, Mahadev Parvati (Shiva Parvati) Temple, and Kumari Ghar. Despite the great losses however, a surprising number of the ancient monuments withstood the tremors and are still standing today. At Patan Durbar Square two temples were destroyed (Char Narayan and Hari Shankar), two paatis were destroyed, and many temples were damaged including Kumbeshwar Temple Complex (the main temple is now tilted), Vishwanath Temple, and Bhimsen Mandir. Bhaktapur Durbar Square suffered extensive damage during the 1934 earthquake in Nepal, and as a result, the buildings were much more widely spaced than at Hanuman Dhoka and Patan Kal Mochan Ghat, Top: before, Bottom: Durbar Squares at the time of the 2015 earthquakes. after (Source: ICIMOD) Subsequently, there was less damage reported at Bhaktapur: Vatsala Devi (Vatsala Durga) Temple and Fasidega Temple were destroyed but other monuments only sustained minor damage. Of the other monuments listed as part of the Kathmandu Valley UNESCO Heritage Site the Buddhist stupa of Bauddhanath was largely destroyed, the stupa of Swayanbhu (Monkey Temple) and the Hindu temple of Changu Narayan sustained some damage, while the Pashupati Hindu Temple survived the earthquake unscathed.


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Also destroyed in Kathmandu was the nine-story Dharahara (Bhimsen) Tower that once stood more than 60 meters (200 feet) tall. The tower was originally built in 1832 and had a viewing deck on the eighth floor. It was reconstructed following the earthquake that struck Kathmandu in 1934. Other specific damage sites included the Manakamana Temple in Gorkha and the northern side of Janaki Mandir. In Gaushala, the top of the Jay Bageshwori Temple and some portions of the Ratna Mandir and Rani Pokhari were destroyed. The Machhindranath Temple in the town of Bungmati was also destroyed. In Tripureshwor, the Kal Mochan Ghat was completely destroyed and the nearby Tripura Sundari also suffered significant damage.

Maju Dega Temple, top: before, bottom: after (Source: ICIMOD)

Agriculture According to data from the World Bank, agriculture contributes approximately one-third to Nepal’s Gross Domestic Product. It is the largest employment sector for around two-thirds of the population with the majority of Nepalese households relying on income from agricultural activities as their primary livelihood. Prior to the earthquakes, approximately 50 percent of agricultural households kept cattle, 38 percent kept at least one buffalo, 52 percent kept goats or sheep, 44 percent kept poultry (ducks and/or fowl), and 10 percent kept pigs. Given these numbers, it is evident therefore, that any loss of livestock or poultry would have detrimental effects on a large proportion of the population. In the fourteen worst affected districts at least 58,832 heads of livestock, including cattle, buffalo, goats, sheep, and pigs, were killed. In Nuwakot alone, 7,662 heads of livestock perished, while in Kavrepalanchowk, the number was 6,987. The number of poultry lost in the fourteen worst affected districts totaled 629,362. Lalitpur lost the highest number of poultry at 88,829 while Sindhuli was a close second with 88,228 poultry killed. Nepal’s Ministry of Agricultural Development estimated that losses of livestock and poultry resulted in an economic loss of NPR14 billion (USD135 million). In addition to livestock and poultry losses, large stocks of food were also lost as result of the earthquakes. In the fourteen worst impacted districts 91,679 metric tons of food stocks were destroyed. Worst affected was Kathmandu, where 13,606 metric tons of food were lost, followed by Kavrepalanchowk, where 10,749 metric tons of food were destroyed.

Industry Brick production is one of the major small industries in Nepal and prior to the earthquakes there were approximately 100 brick kilns estimated to be operating in the Kathmandu Valley: fifteen in Kathmandu, 32 in Lalitpur, and 62 in Bhaktapur. Of all the small scale industries operating in Nepal, brick production was probably worst hit by the earthquakes: all fifteen of Kathmandu’s and 32 of Lalitpur’s kilns were damaged. There was no information available pertaining to damage sustained to the industry in Bhaktapur. However, it could also be the industry which stands to gain most in the aftermath of the earthquakes as hundreds of thousands of buildings throughout the country are likely to be rebuilt.


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Utility Effects Nepal’s state utility provider, Nepal Electricity Authority (NEA) reported that 16 hydropower facilities – out of 23 that were operational – were significantly damaged (one of which was under construction at the time of the temblor). Only three of those affected remained operational in the aftermath of the first earthquake. The affected facilities were Upper Bhotekoshi, Sunkoshi Khola, Indrawati-III, Chaku Khola, Baramchi Khola, Middle Chaku, Sipring Khola, Ankhu Khola-I, Mailung Khola, Bhairab Kunda, Trishuli, Devighat, Sunkoshi, Kulekhani, Chilime, and Upper Trishuli 3A (under construction). Collectively, the shutdowns resulted in a loss of 150 megawatts from Nepal’s power grid which represents approximately one-fifth of the country’s total power supply. (Approximately 93 percent of Nepal’s power is generated by hydropower facilities.) This loss of power supply had large impacts for Nepal which was already vastly underpowered prior to the earthquake; power outages for up to 16 hours per day were a reality for many, even in larger urban areas, such as Kathmandu. The NEA, at the time of the April event, distributed 564 megawatts of electricity, of which 210 megawatts were imported from India. Additionally, hundreds of Micro Hydropower (MH) plants were damaged. These are hydropower facilities built and run by communities with installed capacities between 10 kilowatts and 100 kilowatts. They are usually used to provide power for lighting, agro-processing (for example, grinding, hulling, and milling processes), radio, televisions, and computers. Two hundred and thirty -nine of these MH facilities were damaged affecting 60,713 households in Nepal. Dhading, Gorkha, and Okhaldhunga districts were worst affected by damage to MH facilities.

Infrastructure Effects The earthquakes caused widespread damaged to transportation infrastructures, which, in Nepal, mainly comprise roads. Tribhuvan International Airport, Nepal’s only international airport, near Kathmandu, only closed briefly following both earthquakes and some of the larger aftershocks. The runway sustained cracks but was able to be almost fully utilized. On May 3, it closed its runway to all large cargo flights as repairs were required to be carried out on the runway as the damage worsened in the immediate aftermath of the first earthquake due to the increased number of planes bringing aid and relief workers into the country. The road and highway network across Nepal was heavily impacted, with more than 2,000 kilometers (1,242 miles) – or 13 percent of the network – damaged or destroyed. Worst affected were the districts of Sindhupalchowk, Dolakha, and Nuwakot. The severe cracking and debris-covered roadways made it very challenging for relief and rescue teams to initially reach some of the hardest-hit remote areas. Nepal’s Department of Roads indicates that the country has 15,000 kilometers (9,320 miles) of “strategic roads”, which includes 21 highways and 208 feeder roads.


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Impact Forecasting Reconnaissance The severe damage sustained by of buildings as a result of the 2015 Nepal earthquake sequence presented a unique opportunity for the engineering community to understand the seismic performance of different types of structures in Nepal. Observation of earthquake-affected facilities not only provides insights into the vulnerability of different types of buildings and structures , but also helps the industry to model them more effectively in catastrophe risk assessment. A team of earthquake and structural engineers from the Impact Forecasting (IF) team within Aon Benfield performed a reconnaissance survey in various localities within the earthquake-affected regions from June 16-22 as shown in Figure 6.

Figure 6: Localities surveyed

Building Typology in Nepal The main building typologies used in Nepal are adobe structures, brick or stone masonry with mud mortar (BM/SM), brick or stone masonry with cement mortar (BC/SC), wooden structures (W), and reinforced concrete (RC) buildings. The distribution of building typologies is plotted in Figure 7 which is taken from the 2011 Nepal census data. An example photo for each of the building type is shown in Figure 8. Residential buildings largely consist of masonry and RC buildings, and in the village areas adobe and wooden structures are also common. The modern high value (insured) residential buildings are largely RC buildings. The tallest RC buildings (15- 20 stories) are typically residential, and the lack of land availability will result in more tall buildings in the future. In the traditional business streets, 2 to 3 story RC/BC buildings with the ground floor dedicated to commercial purposes are common. The high value commercial buildings are largely medium rise (510 stories) RC buildings. There are several resorts and hotels located outside the Kathmandu Valley (mainly in hilly regions). Most of them are RC buildings and tend to have a higher rate of being insured. It is common to have mixed lines of business (LOB) in the same building in the Kathmandu Valley: in low rise buildings, commonly the ground floor is dedicated to commercial purposes while the higher stories are residential.


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Figure 7. Building inventory in Nepal (National Population and Housing Census, 2011)

(a)

(b)

(d)

(c)

(e)

Figure 8: Building typologies in Nepal: (a) adobe structure, (b) wooden structure, (c) brick masonry with mud mortar, (d) brick masonry with cement mortar and (e) RC structure.


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Adobe Structures Adobe buildings were prevalent throughout Nepal in the past; however, they are still commonly found in rural areas of Nepal mainly due to their economic viability as well as local availability of material and workmanship. About one fifth of the world’s population dwell in adobe buildings however, they are not of significant interest to the insurance industry due to their lower value. This type of building has demonstrated poor performance during past earthquakes throughout the world. During our field visit, extensive damage to these buildings were observed (Figure 9), largely due to the heavy weights of the structures, lack of structural integrity, e.g. poor/no wall to roof connection, and brittle behavior of random rubble masonry.

Figure 9: Seismic performance of adobe structures in the Melamchi area

Masonry structures Masonry structures comprise the majority of the global built environment. Despite their prevalence and long history, the behavior of masonry structures under earthquake loading is still not well understood. The large number of human fatalities in such constructions from past earthquake events gives an indication of the seismic vulnerability of these buildings. The inherent nature of masonry is both brittle and dense, which results in poor seismic performance. There are five prevalent modes of failures for masonry construction: 1) corner cracking; 2) diagonal cracking; 3) out of plane collapse; 4) multi-leaf wall failure; and 5) gable failure. These five modes of failure were commonly observed as shown in Figure 10.The lack of connection between walls leads to cracks at the corners and is shown in Figure 10a. The diagonal cracks (X-shaped cracks) in the wall, as shown in Figure 10b, are the most commonly observed failure in masonry constructions and occurs due to the principal tensile stress exceeding the shear strength of masonry. Further, if the connection between the walls and floors is not adequately restrained, the whole wall panel – or a significant portion of it – will overturn due to seismic excitation in the perpendicular direction to the wall plane (out of plane collapse) as shown in Figure 10c. The traditional masonry construction often has a large wall thickness (about 50 c entimeters thick) which comprises three layers: the outer layers are constructed with good quality bricks while the inner layer is filled with poor quality materials. Such constructions have been found to perform poorly during earthquakes (Figure 10d), due to the lack of integral connection between different layers of the wall. Gable walls located at the top of buildings are subjected to larger stress, and are consequently prone to failure (Figure 10e).


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(a)

(c)

(b)

(d)

(e)

Figure 10: Different modes of failure of masonry structures: (a) corner crack, (b) diagonal crack, (c) out of plane collapse, (d) multi-leaf wall failure and (e) gable failure

Reinforced concrete structures Reinforced concrete frame buildings are becoming increasingly common in Nepal, especially in urban areas. A typical RC building is made of horizontal members (beams and slabs) and vertical members (columns and walls), supported by foundations that rest on the ground. The system comprising the columns and connecting beams is called an RC Frame and offers the primary resistance against earthquake forces. Most of the RC constructions in Nepal are non-engineered (i.e. not structurally designed) and, as such, they have been found to display poor performance during earthquakes. Building more floors than designed, under-sized columns, lack of reinforcements, large spacing of stirrups, and undesired architectural plan were all observed. Such buildings collapsed in a pancake mode of failure (Figures 11a, 11b and 11c). Mid- and high-rise RC buildings are largely used for residential and commercial purposes. Most of those structures have a dedicated car parking area at the ground floor, so columns do not have any partition walls between them. The partition/infill walls are not meant to carry any vertical load; however, during earthquakes, they participate in load transmission. So their absence in any story makes the frame weaker. Such a story is referred to as a ‘soft story’. Soft stories in buildings have consistently shown poor performance during past earthquakes across the world. There were several such failures noted during our survey; an example is shown in Figure 11d.


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During past earthquakes, RC frame buildings that have columns of different heights within one story, suffered more damage in the shorter columns as compared to taller columns in the same story. Due to Nepal’s hilly terrain, several RC buildings are constructed on slopes, and subsequently have different column heights. These buildings sustained severe damage (Figure 11e). Furthermore, buildings are often built next to each other without adequate gaps, so the “seismic pounding effect” was widely observed: some buildings collapsed or sustained damage due to the failure of an adjacent building (Figure 11f). The modern RC buildings, especially the high value buildings, are designed largely based on the Nepal Building Code (NBC 105) and Indian codes (IS 475, IS 13920 and IS 1893). Performance of these buildings was much better than other types of structures in Nepal. The damage was largely restricted to non-structural components (e.g. infill walls), while beams and columns developed repairable cracks (Figures 12 and 13).

(a) Pancake failure

(b) Undersized column

(c) Poor reinfocement detailing

(d) Soft story failure

(e) Short column failure

(f) Pounding effect

Figure 11: Seismic performance of RC structures (non -engineered)


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(a) Cityscape

(b) Park View Horizon

(c) Minor cracks in beam

(d) Cracks in infill walls Figure 12: High value residential apartments


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Figure 13: High value commercial buildings

Industrial structures Two types of industrial structures were observed: one was the typical steel structure with truss and steel columns, and the other was composite construction with RC columns and steel truss (Figure 14). Minimal or no damage was observed in the industrial structures. Damage that was seen were largely restricted to masonry infill walls.

Figure 14: Seismic performance of industrial structures


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Heritage structures Temples form a major part of the cultural heritage in Nepal. They are abundant and many of them are listed in UNESCO’s world heritage list. As well as temples, there are three heritage structures (also known as Durbar Squares). These heritage structures are a significant tourist attraction for Nepal due to their cultural and religious significance. As noted previously in the report, heritage structures were badly affected during these earthquakes. The damage showed a pattern in that tall and tower-like structures suffered more damage in comparison with simpler and more stable structural forms. Nepali temples can be broadly classified into shikhara (Figure 14a) and pagoda types (Figure 14d). These temples suffered varying degrees of damage from minor cracks to complete collapse. Generally walls in historic constructions are comprised of brick masonry, particularly multi-leaf walls. As explained in the previous section, these are known to be vulnerable to earthquakes. Taba Sattal in Bhaktapur Durbar Square is a typical example of this (Figure 14c). Recent work to enhance seismic performance at some sites has had a positive influence in some temples like Patan Durbar Square which received minor damage as it was structurally strengthened previously (Figure 14f). Among the collapsed heritage structures, one of the most significant was the nine-story Dharahara Tower (Figure 14g). The structure, which was tall and flexible, naturally had a high resonance period of 2-4 seconds which coincided with the resonance period of the basin. This resulted in the total collapse of the tower. Simple and stable structural forms used in some heritage structures such as in Pashupatinath Temple suffered only minimal damage (Figure 14i).

(a) Vatsala Temple Bhaktapur before

(b) Vatsala Temple Bhaktapur after

(c) Taba Sattal in Bhaktapur Durbar Square

(d) Bhairavnath Temple Bhaktapur before

(e) Bhairavnath Temple Bhaktapur after

(f) Patan Durbar Square


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(g) Dharahara Tower before

(h) Dharahara Tower after

(i) Pashupatinath Temple Figure 15: Seismic performance of heritage buildings

Infrastructure facilities Infrastructure facilities performed poorly during the earthquakes as communication towers failed and hydroelectric power stations were severely damaged. It is common practice in Nepal to have mobile phone towers mounted on buildings and often those buildings are not designed for the additional loads coming from the tower. During the earthquakes many such towers went out of service (Figure 16a) due to varying levels of incurred damage. However, most of the towers have since been restored. Road damage due to landslide and retaining wall failure were observed (Figure 16b). A concrete bridge under construction, on the way to Melamchi also collapsed (Figure 16c).

(a) Roof top tower

(b) Retaing wall failure

(c) Bridge failure Figure 16: Damage to infrastructure facilities

Secondary Effects Secondary effects such as landslide, surface rupture, and soil settlement were significant. Liquefaction was observed in the Kathmandu Valley during the 1934 earthquake, and large parts of the region are susceptible (Piya 2004). During the 2015 earthquakes, liquefaction was also reported in several parts of Nepal (Aydan and Ulusay, 2015). Topography was the primary reason for failure of several structures in the Kathmandu Valley and beyond: buildings located on slopes sustained heavy damage. The anomalous features (long-period and longer duration) of ground motion due to the geological structure of the Kathmandu Basin played a critical role in the damage of tall structures. Rock fall (Figure 17a), landslide (Figure 17b) and soil settlement (Figure 17c) were observed in several localities.


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(a) Rock fall

(b) Landslide

(c) Soil settlement Figure 17: Secondary effects

Conclusions from the reconnaissance survey Wrap-up of main points of the reconnaissance survey:  



 

 

Adobe houses are common in rural areas and are largely constructed with random rubble masonry that suffered severe damage. Masonry constructions are utilized for both residential and small scale commercial properties. Most of the construction is non-engineered so extensive damage was observed. The prevalent modes of failure were corner cracking, diagonal cracking, out of plane collapse, multi-leaf wall failure, and gable failure which could have been prevented with proper seismic design. High-value construction in Nepal is invariably of RC structures for both residential and commercial lines of business. The violation of building codes by adding additional floors without any regard for the structural integrity led to the collapse of several RC buildings. The well-designed RC structures performed well, with minor reparable structural cracks; however, damage to non-structural components were severe. Damage to industrial structures was minimal. Heritage structures sustained varying levels of damage. Generally speaking, the stable structures suffered less damage; while the taller (more flexible) structures suffered major damage. Infrastructure facilities suffered relatively minor damage, with the exception of communication towers and hydroelectric power stations. The secondary effects of ground motion modification due to the geological structure of the Kathmandu Basin and landslides increased losses and damage suffered. Tall structures located in the Kathmandu Valley reacted strongly to the earthquake due to the basin amplification of long period ground motion. Landslides caused major property destruction in the hilly areas, wiping out several villages.


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Impact Forecasting: Real-Time Response Immediately after the April 25, 2015, MW 7.8 Nepal (Gorkha) earthquake, Impact Forecasting activated its real-time response team. The main objective was to develop an earthquake scenario model to be used for rapid loss assessment and early-warning of losses to insurance portfolios in the country. The model was created within 48 hours of the event occurring and was launched at the Impact Forecasting Revealed Conference in Singapore (May 6, 2015). This section summarizes the key features of the Nepal earthquake scenario model, and the methods and assumptions used for each model component.

Exposure Component To ensure accurate geocoding of a portfolio at different levels of granularity, geographic reference layers should be prepared based on the available exposure data. Three reference layers were initially considered as follows:   

4-km grid level (12,248 grid cells) District level (75 polygonal zones) Regional level (5 zones)

There were no country-specific CRESTA zones available for Nepal (CRESTA, 2015).

Hazard Component Four fault rupture scenario models with variable earthquake source magnitudes, focal depths, and fault orientations were selected. The variation of earthquake source parameters was made to account for difference in preliminary interpretation of centroid moment tensor solutions between the USGS Preliminary Determination of Epicenters (USGS, 2015) and Global Centroid Moment Tensor (2015). For the purposes of rapid loss estimation, the influence of finite-fault effects such as slip distribution and directivity were not considered in the ground-motion modeling. This assumption could have a significant influence on the predicted ground motions; however, because of its complexity, it was beyond the scope of the real-time response. The rupture scenarios considered in the model development are presented in Table 2 below and the corresponding hazard footprints, in terms of macro-seismic intensity in Figure 18. Epicenter Lat (N)

Lon (E)

Depth (km)

Mw

FM

Strike ()

Dip ()

Rake ()

Rupture b dimension (km)

Scenario 1

28.147

84.708

10

7.8

rv

295

11

108

150/88

Scenario 2

28.147

84.708

24

7.8

rv

290

7

101

150/88

Scenario 3

28.147

84.708

24

7.8

rv

290

7

101

150/88

Scenario 4

28.197

85.192

12

7.9

rv

293

7

108

150/88

Scenario ID

a

a

FM: focal mechanism, rv: reverse b Rupture dimension: rupture length / rupture width

Table 2: Rupture scenarios (Source: Impact Forecasting)

To account for the effects of near-surface geological conditions on site amplification, the timeaveraged shear-wave velocity in the upper 30m (Vs30) was incorporated into seismic hazard calculation through ground motion modeling (USGS, 2015a). The ground motion model of Akkar and Bommer (2010) was preliminarily adopted to estimate level of ground shaking at any given site. The Akkar and Bommer (2010) ground motion model was derived from observations in Europe, the Mediterranean, and Middle East from shallow crustal earthquakes. The orthogonal regression of Worden et al. (2012) was used for conversion between ground motion and macro-seismic intensity.


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(a)

(b)

Figure 18: Hazard footprints of the 2015 MW 7.8 Gorkha earthquake w ith respect to distance to the surface projection of the rupture. a) Four rupture scenario models considered by Impact Forecasting, b) preferred hazard scenario (scenario 4)

Vulnerability component The vulnerability component was developed in accordance with the expected insurance portfolios, data resolution in the country and the insurance industry characteristics. Three lines of business (LOB) – residential, commercial and industrial – were of primary interest. Most of the high value (insured/insurance potential) constructions in Nepal are of reinforced concrete constructions for both residential and commercial LOBs. Due to the lack of land availability, particularly in the Kathmandu Valley, there have been several high rise (10-20 story) buildings built for residential apartments. Commercial buildings are largely of medium rise (5-10 story) reinforced concrete constructions. Masonry construction has the major share of the residential LOB. Industrial LOB is predominantly of steel construction. To model the insurance exposures, Impact Forecasting developed three occupancy-based damage curves (Figure 19). The damage curves specific to different building types in Nepal are rare, however regional knowledge was applied to calibrate them considering the similarities of the local construction practice with that in the Indian subcontinent, in particular for the modern reinforced buildings.

Residential

Damage Ratio

Commericial Industrial

5

6

7

8

9

10

11

12

MMI

Figure 19: Damage curves used for modelling Nepal seismicity (Source: Impact Forecasting)


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Concluding Remarks The first earthquake scenario model following the MW 7.8 Nepal (Gorkha) earthquake was developed by Impact Forecasting. Four fault rupture scenarios with variable earthquake source parameters were considered in order to account for the uncertainty in the hazard component development. A set of damage curves were produced through the calibration of local construction types in Nepal to similar structures located in neighbouring region. This new model provides a possibility for shareholders to determine early loss estimates considering the fact that the final loss figures usually only become available many months after the event. It is hoped that this scenario model will initiate a growing use and development of catastrophe models to help better understand and manage earthquake risk in the country.


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Financial Losses Economic Loss The overall economic cost of the Nepal earthquake(s) – including damage in Nepal, India, Tibet and Bangladesh – is estimated around USD8.0 billion. The World Bank’s Post Disaster Needs Assessment tentatively listed total economic damage solely in Nepal at USD5.1 billion and valued additional economic losses (including business interruption and specific sector losses) at USD1.9 billion. The overall cost to rebuild in the country was listed at roughly USD7.0 billion. This value is equivalent to more than one-third of Nepal’s entire Gross Domestic Product (GDP). Many countries from around the world (including India, China, and the United States) donated billions (USD) to Nepal for relief and recovery. Economic losses in Nepal from the World Bank study are broken down by sector in Table 3 below. Sector Agriculture Communications Community Infrastructure Cultural Heritage Disaster Risk Reduction Education Electricity Employment & Livelihoods Environment & Forestry Financial Sector Gender & Cross Cutting Issues Governance Health & Population Housing & Human Settlements Industry & Commerce Irrigation Nutrition Social Protection Tourism Transport Water & Sanitation Total Econom ic Loss (NPR Millions) Total Econom ic Loss (USD Millions)

Dam age Cost 16,405 3,610 3,349

Additional Loss 11,962 5,089

Total Disaster Effect 28,367 8,695 3,349

Lost Personal Incom e 4,603

Total Needs

16,909 17

2,313 137

19,222 155

20,567 8,204

28,064 17,807

3,254 3,435

31,318 21,242

39,705 18,586 12,548

32,960

1,061

34,021

25,197

4,394

26,891

31,285

32,856 1,085

16,690 5,197 303,631

1,139 46,748

16,690 6,337 350,379

16,644 11,269 327,762

15,560 4,939 4,451

17,408 383

16,874

34,282 383

6,322

18,862 17,188 10,506 513,380

62,379 4,930 873 187,085

81,241 22,118 11,379 700,465

6,200

17,125

27,405 467 5,036 6,398 41,336 28,185 18,106 666,306

5,134

1,871

7,005

171

6,663

Table 3: World Bank economic impact assessment in Nepal (Source: World Bank)


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The World Bank also reported that an additional 3 percent of Nepal’s population (with an equivalent of approximately 1 million people) had been pushed into poverty. The economic growth rate for the financial year 2014-2015 is expected to be 3.04 percent - the lowest it has been in eight years. Beyond Nepal, heavy economic losses were forecast in northern India and Tibet given the volume of casualties and damaged homes. Total economic losses and reconstruction costs were estimated in the hundreds of millions (USD), if not more.

Insured Loss Despite the high level of economic cost from the earthquakes, just a small fraction of the losses were covered by insurance companies. Overall insured losses in Nepal, India, Tibet and Bangladesh were estimated around USD200 million. As of August 2015, the Nepal Insurance Board (IB) reported that 16,603 claims were filed to the 17 non-life insurance companies operating in the country with a total value of NPR18.43 billion (USD175 million). The agency expected total non-life claims to settle around NPR20 billion (USD190 million). Life insurance companies received ~400 claims with payouts at NPR76 million (USD1.0 million). A breakdown of non-life insurance claims by company, as provided by the Nepal Insurance Board, is provided in Table 4 below. The data is updated as of August 2015. Insurance Com pany Sagarmatha Insurance Siddhartha Insurance Shikhar Insurance Nepal Insurance Neco Insurance NLG Insurance Prabhu Insurance Prudential Insurance Lumbini Insurance Premier Insurance National Insurance United Insurance Himalayan General Insurance The Oriental Insurance Rastriya Beema insurance Everest Insurance Total Non-Life Claim s Total Non-Life Claim s Am ount (NPR Millions ) Total Non-Life Claim s Am ount (USD Millions)

Num ber of Claim s 2,812 1,616 1,504 1,503 1,473 1,209 1,147 1,024 852 819 716 612 521 396 237 162

Total Claim s Am ount (NPR) 1,310 1,700 1,130 653 971 862 1,080 669 406 1,220 750 866 4,880 1,050 625 258

16,603 18,430 175

Table 4: Non-Life Insurance Claims by Company as of August 2015 (Source: Nepal Insurance Board)

Of interest, fire insurance claims represented nearly 75 percent of all non-life insurance claims that were filed and most were from commercial and industrial properties. The IB worked with insurers to quickly settle claims and noted that they would have to maintain provisioning of 115 percent of their liability in their annual financial statement if they had not paid out the claims amount. Nepalese insurers were expected to absorb roughly NPR5 to 6 billion (USD47 to 57 million) of the costs themselves, and the rest covered by reinsurers abroad. Insurers only retain a small portion of the risk in Nepal, as most of the risk is transferred to reinsurers located in India, Malaysia, and countries in Africa – amongst others. The General Insurance Corporation of India – the largest reinsurance partner of the Nepalese insurance industry – had a gross exposure in the Nepalese insurance market of around USD140 million at the time of both major earthquake events. However, it only anticipated claims worth USD50 million.


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Nepal Insurance Industry Insurance coverage in Nepal remains very low, and one of the lowest in the world. According to a 2012 study, insurance penetration ending in fiscal year 2012 included total premiums of NPR19.7 billion (USD186 million). This represented just 1.41 percent as a percentage of the national GDP. This ratio has slowly increased since 2004/2005, when the percentage was 0.96 percent. See Table 5 below for full statistics. Market practitioners anticipate a faster growth spurt in penetration rates over the next few years due to an increase in insurance awareness following the earthquake. Fiscal Year 2011/12 2010/11 2009/10 2008/09 2007/08 2006/07 2005/06 2004/05

Prem ium (NPR Millions) 19700.0 17486.1 15262.7 11056.1 9341.8 7912.2 6643.8 5682.4

Prem ium (USD Millions) 190 165 144 105 89 75 63 54

Prem ium as % of Nepal GDP 1.41% 1.31% 1.30% 1.11% 1.14% 1.08% 1.01% 0.96%

Table 5: Insurance coverage growth in Nepal (Source: Nepal Insurance Board)

Non-Life Insurance Industry There are 17 non-life insurance companies in Nepal and no new companies have been licensed in the country since 2005. There are currently 203 branches for the 17 companies spread across Nepal. Between 2004-2012, the industry averaged a nearly 18 percent premium growth rate in non-life insurance policies. The 2004-2012 annual breakdown is found in Table 6 below. Fiscal Year 2011/12 2010/11 2009/10 2008/09 2007/08 2006/07 2005/06 2004/05



Prem ium Grow th Rate 14.67% 10.38% 46.97% 14.76% 17.12% 15.20% 6.02% 15.04%

Table 6: Non-life insurance coverage growth in Nepal (Source: Nepal Insurance Board)

Growth rates over the short to medium term are expected to rise due to the reconstruction activity as well as industry efforts to alleviate significant under-insurance of insured property. It is also expected to push into rural areas, with new products catering to the agrarian economy such as Crop and Cattle insurance on the back of strong encouragement from the regulator and premium subsidies by the government.


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Life Insurance Industry There are nine life insurance companies in Nepal and no new companies have been licensed in the country since 2008. There are currently 442 branches for the nine companies spread across Nepal, and the industry averaged nearly 23 percent annual premium growth from 2004-2012. The 2004-2012 annual breakdown is found in Table 7 below. Fiscal Year 2011/12 2010/11 2009/10 2008/09 2007/08 2006/07 2005/06 2004/05



Prem ium Grow th Rate 11.30% 19.20% 32.11% 20.87% 18.74% 22.02% 26.74% 20.02%

Table 7: Life insurance coverage growth in Nepal (Source: Nepal Insurance Board)

New Minimum Paid Up Capital Regulations The Insurance Board, which regulates the industry, has proposed new insurance legislation to hike the minimum paid up capital of life insurers from NPR500 million (USD4.7 million) by 10 times to NPR5 billion (USD47 million). For non-life companies, this increase is expected by 16-fold from NPR250 million (USD2.4 million) to NPR4 billion (USD38 million). If this draft bill is passed, it is expected to further hasten the growth and maturity of the insurance industry. Also, it could potentially trigger mergers and acquisitions that would result in a stronger and more consolidated landscape in this emerging market. Establishment of Nepal Re Nepal Re was established in November 2014 as the first domestic and national reinsurance company with a paid up capital of NPR5 billion (USD47 million). It is jointly owned by the government (43.5 percent), the non-life insurers (38.4 percent), plus the life insurance companies and others (18.1 percent). Nepal Re will absorb the Nepalese Riots, Strikes, Malicious Damage, Terrorism and Sabotage Market Pool (whose members are the local non-life insurers) which was previously established in 2002. It is also anticipated that Nepal Re shall commence receiving a compulsory cession of 5 percent from th primary insurers of each direct insurance policy issued from the 4 quarter of 2015. Nepal Re is preparing to offer capacity for both facultative and Treaty business in the coming months. The treaty renewal anniversary date of the entire Nepal market is 17th July.


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Special Acknowledgements Impact Forecasting would like to provide special thanks and acknowledgement to the following individuals who were imperative in helping arrange field trips to damage site locations. These people include: -

Mr. Dinesh P. S. Poudyalaya Consultant

-

Ms. Badal Pokharel Tribhuvan University

-

Mr. Rajan Thapa Nepal Claims Bureau

-

Mr. Kichah Chitrakar Development E-FORT Nepal P. Ltd

-

Ms. Rama Dahal Everest Insurance Co. Ltd

-

Mr. Pradip Mohan Everest Insurance Co. Ltd

-

Mr. Raman Naidu Himalayan General Insurance Co. Ltd

-

Mr. Chunky Chhetry Sagarmatha Insurance Company Ltd


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Appendix A Districts of Nepal


34


Appendix B Total Number of Fatalities & Injuries in Nepal by District District Sindhupalchow k Kathmandu Nuw akot Dhading Rasuw a Gorkha Bhaktapur Kavrepalanchow k Lalitpur Dolakha Ramechap Makaw anpur Solukhumbu Okhaldhunga Sindhuli Chitaw an Sunsari Parsa Lamjung Mahottari Rautahat Kaski Morang Bhojpur Sarlahi Bara Taplejung Jhapa Terhathum Udayapur Siraha Dhanusha Naw alparasi Palpa Gulmi Shyanja

Fatalities 3,557 1,233 1,109 680 660 449 333 318 180 178 42 33 22 20 15 10 9 6 5 4 3 3 2 2 2 2 1 1 1 1 1 1 1 1 1 1

Injured 1,569 7,950 1,050 1,218 771 952 2,101 1,179 3,051 661 134 229 100 61 230 143 35 50 40 16 38 38 59 13 70 62 7 25 14 35 39 45 41 16 11 23

District Myagdi Baglung Rolpa Rukum Panchthar Ilaam Dhankuta Shankhuw asabha Khotang Saptari Rupandehi Kapilbastu Tanahu Manang Mustang Parbat Dang Pyuthan Salyan Jumla Jajarkot Dailekh Surkhet Bardiya Banke Kailali Kanchanpur Shankhuw asabha Khotang Saptari Rupandehi Kapilbastu Tanahu Manang Mustang Parbat

Fatalities 1 1 1 1 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0

Injured 10 14 2 6 9 10 5 8 8 24 39 6 27 1 1 21 10 9 2 2 3 1 3 2 1 1 1 8 8 24 39 6 27 1 1 21

Source: Nepal Disaster Risk Reduction Portal


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Appendix C Total Number of Damaged or Destroyed Properties in Nepal by District District Sindhupalchow k Kathmandu Nuw akot Dhading RASUWA Gorkha Bhaktapur Kavrepalanchow k Lalitpur Dolakha Ramechhap Makaw anpur Solukhumbu Okhaldhunga Sindhuli Chitaw an Sunsari Parsa Lamjung Mahottari Rautahat Kaski Morang Bhojpur Sarlahi Bara Taplejung Jhapa Terhathum Udayapur Siraha Dhanusha Naw alparasi Palpa Gulmi Shyanja Myagdi Baglung Rolpa Rukum Panchthar Ilaam Dhankuta Shankhuw asabha Khotang Saptari Rupandehi Kapilbastu Arghakhanchi Tanahu Manang Mustang Parbat

Governm ent Hom es Destroyed 710 85 15 93 8 227 5 48 217 517 54 46 75 18 92 0 5 0 39 10 0 10 0 22 7 1 0 0 0 63 0 0 0 2 81 9 0 2 0 0 22 34 0 88 18 0 1 0 0 22 8 2 12


Governm ent Hom es Dam aged 37 277 14 58 4 36 51 31 198 0 56 177 142 38 231 40 83 12 48 14 9 45 51 65 27 0 69 46 60 684 20 8 14 24 277 49 0 4 6 47 5 42 39 208 55 47 17 23 8 54 12 19 63

Private Hom es Destroyed 63,885 43,502 75,562 81,313 11,368 59,527 18,900 49,933 17,444 48,880 26,743 20,035 9,172 10,031 18,197 472 7 0 10,695 500 70 1,793 3 3,194 0 50 4 95 180 37 0 4 910 1,434 2,624 5,003 115 1,952 62 117 229 375 929 1,886 6,167 0 1 0 258 4,877 63 76 3,542

Private Hom es Dam aged 2,751 56,024 4,200 3,092 267 13,428 9,054 23,714 8,064 3,120 13,173 17,383 11,137 3,107 10,028 754 375 35 11,535 600 199 4,947 112 6,316 0 0 28 144 1,901 1,069 540 47 3,500 2,665 5,114 11,829 1,077 1,963 159 328 926 2,647 1,500 4,443 12,780 1,161 79 66 1,053 14,474 285 409 7,735

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District Dang Pyuthan Salyan Dolpa Jumla Kalikot Jajarkot Dailekh Surkhet Bardiya Banke Kailali Doti Achhaam Bajura Dadeldhura Kanchanpur

Governm ent Hom es Destroyed 1 0 1 0 0 3 0 0 0 0 0 0 0 0 0 0 0

Governm ent Hom es Dam aged 28 0 17 0 0 17 8 25 11 0 0 5 1 0 0 0 1

Private Hom es Destroyed 7 3 24 1 0 4 0 1 1 0 0 0 0 0 0 0 0

Private Hom es Dam aged 1,080 66 282 5 2 21 1,877 216 31 40 81 4 0 55 1 1 0

Source: Nepal Disaster Risk Reduction Portal


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Contact Information Adityam Krovvidi Head of Impact Forecasting Asia Pacific Aon Benfield Analytics Impact Forecasting +65.6239.7651 [email protected]

Goran Trendafiloski Head of Earthquake Model Development Aon Benfield Analytics Impact Forecasting +44.207.522.8209 [email protected]

Steve Bowen Associate Director Aon Benfield Analytics Impact Forecasting +1.312.381.5883 [email protected]

Jetson Abraham Senior Research Consultant Aon Benfield Analytics Impact Forecasting +91.80.3091.8000 [email protected]

Claire Kennedy Senior Analyst Aon Benfield Analytics Impact Forecasting +65.6645.0110 [email protected]

Puneet Bajpai Principal Research Consultant Aon Benfield Analytics Impact Forecasting +91.80.3091.8303 [email protected] Jeongmin Han Earthquake Catastrophe Model Developer Aon Benfield Analytics Impact Forecasting +44.207.522.4084 [email protected]


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About Aon Benfield Aon Benfield, a division of Aon plc (NYSE: AON), is the world’s leading reinsurance intermediary and full-service capital advisor. We empower our clients to better understand, manage and transfer risk through innovative solutions and personalized access to all forms of global reinsurance capital across treaty, facultative and capital markets. As a trusted advocate, we deliver local reach to the world’s markets, an unparalleled investment in innovative analytics, including catastrophe management, actuarial and rating agency advisory. Through our professionals’ expertise and experience, we advise clients in making optimal capital choices that will empower results and improve operational effectiveness for their business. With more than 80 offices in 50 countries, our worldwide client base has access to the broadest portfolio of integrated capital solutions and services. To learn how Aon Benfield helps empower results, please visit aonbenfield.com.

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