APOORV DABRAL – Head of Catastrophe Modeling, APAC, JLT Re, Singapore
Indonesia is located along the Pacific ‘Ring of Fire’ and at the convergence of several tectonic plates, it is one of the most earthquake-prone countries in the world. In 2018, there have been a number of significant events in the country, resulting in fatalities and widespread destruction such as the Lombok earthquake series in July and August and the Sulawesi earthquake in September. Indonesia is also the country with the highest number of active volcanoes; in 2018 there was no major volcanic eruption, however a volcanic collapse caused the Sunda Strait tsunami, resulting in significant loss of life and property.
Lombok Series of Earthquakes, Indonesia
In the months of July and August, the islands of Bali, Lombok, and West Nusa Tenggara were impacted by over 1,000 earthquakes with the three most significant occurring on July 28, August 5 and August 19.
The first event was a Mw 6.4 earthquake which struck at 5:50 PM local time on July 28 on the northern side of Lombok Island at a relatively shallow depth of 14 kilometers. It caused widespread damage, particularly in east Lombok regency with minor damage also reported from Bali.
The second event was a Mw 6.9 event on the evening of August 5 near Loloan village in Northern Lombok at a depth of 31 kilometers. This event was considered to be the main shock with the July 28 event being its foreshock and resulted in more than 500 deaths. Both events were attributed to the stresses along the Flores Back Arc Thrust fault system. This was the most damaging earthquake in the series, largely impacting Northern and Eastern Lombok as well as Bali. While some nonstructural damage was reported in both Lombok and Bali Airports, both facilities continued operating flights for displaced tourists. The final significant event of the three, also a Mw 6.9 event, occurred on the evening of August 19 in the northeastern part of Lombok Island near Sembelia and Sembalun.
Figure 1: Earthquakes in Lombok from July 28 to August 5. (Source: USGS, JLT Re)
The series of earthquakes resulted in damage to more than 70,000 houses, of which about 30,000 were severe. More than 600 schools, several bridges, and places of worship were also impacted. The most affected area was North Lombok, along with West and East Lombok. Insured loss is expected to be low given that Lombok has low insurance penetration and limited impact to Bali. The series of earthquakes was attributed to the complex tectonics associated with the Flores Back Arc Thrust Belt. Initial analysis suggested the earthquakes all occurred on different overlapping thrust faults at a shallow depth, however all of them are likely coupled with the main structure, i.e. the Flores Back Arc Thrust Belt.
The timing was relevant in this series of earthquakes in determining the insurance loss payment. The loss payout depends on the specific loss occurrence, hours clause, and event definition included in the contract. The short time interval between events also gives rise to difficulty in allocating specific damage to events as required under insurance contract. Such issues require the scientific community and insurance industry to work closely together for a resolution.
MW 7.5 Sulawesi (Palu) Earthquake, Indonesia
On September 28, a Mw 7.5 earthquake struck Donggala Regency of Central Sulawesi at 6:02 PM local time. This was a relatively shallow event with an estimated depth of 10 kilometers but, due to its strong intensity, was felt in the provincial capital of Palu some 78 kilometers from the epicenter and as far away as Samarinda in East Kalimantan, Indonesia and in Tawau, Malaysia. The earthquake occurred on the strike-slip Palo Karu Fault, one of the most active faults in Sulawesi. A tsunami with a reported height of up to 6 meters (BNPB) followed the earthquake, affecting Palu, Donggala and Mamuju and inducing major liquefaction and landslides in and around Palu.
Figure 2: Oct. 26, 2018, shows a submerged mosque on a beach in Palu on the Indonesian island of Sulawesi following an earthquake-tsunami disaster on September 28. (Source: Kyodo via © 2018 The Associated Press)
This event resulted in the death of more than 2,000 people with more than 1,000 people still missing or considered buried. The ground motion along with tsunami, landslide, and liquefaction caused considerable destruction in the regions of Palu, Sigi, and Donggala. Almost 70,000 houses and 2,500 schools were impacted with damage to several other buildings such as hospitals, hotels, and commercial centers also reported. Infrastructure was severely cripples with as a result of damage to the Palu City’s airport, bridges, and roads.
An earthquake on a strike-slip fault usually cannot produce substantial tsunami waves. In strike-slip earthquakes, the primary movement of the two blocks of earth is in the horizontal direction. Tsunamis are commonly associated with the vertical movement of the earth crust, which is more likely in the megathrust earthquakes occurring in subduction zones, like the one in 2004. Conjecture within the scientific community is that a submarine landslide could be the reason for this localized tsunami, the waves of which are further amplified by the long narrow bay leading into Palu City. Another feature of this earthquake was liquefaction which affected Balaroa (Palu Barat District), Petobo (Palu Selatan District), and Biromaru (Sigi Biromaru District).
Sunda Strait Volcano Induced Tsunami
2018 came to a close with another catastrophe whose formations was unusual in nature. On December 22, a tsunami formed from the collapse of a section of the Anak Krakatau volcano, subsequently striking landmasses surrounding the Sunda Strait in Indonesia. Satellite images and wave signals suggest this tsunami is also the result of a portion of the volcano collapsing into the sea. Anak Krakatau, which literally means “child of Krakatau”, is a volcano that emerged in 1927 following the collapse of the Krakatau volcano in 1883. The Krakatau volcanic eruption in 1883 was one of the most destructive and deadliest volcanic eruptions, killing more than 36,000 people, most of which were caused by the tsunami generated by the collapse of this volcano into the sea.
Figure 3: Affected areas estimate of Banten province by the collapse of the Anak Krakatau volcano. (Source: UNITAR-UNOSAT)
According to the Indonesia Disaster Agency (BNPB) as of December 24, there were about 450 fatalities with 14,000 injuries and almost 30,000 people displaced. The physical damage was reported on 2,700 dwellings, 90 hotels, and 500 boats and ships. The affected areas included the west coast of the Banten Province, namely Pandeglang Regency and Serang Regency, and the southern coast of the Lampung Province , which includes South Lampung Regency, Tanggamus, and Pesawaran. The coastal areas of Pandenglang district were most impacted, resulting in 267 fatalities. The beaches in this region were lined with hotels and businesses, and as such heavily populated by tourists during the long holiday weekend. This surge of tourism with the absence of tsunami early warning dramatically increased the death toll from this event.
Indonesia had suffered from a devastating earthquake and tsunami in 2004 and has since implemented a tsunami warning system across the country, however due to the unique nature of this tsunami – which was generated from a volcano rather than an earthquake, it went undetected. A lack of funding, vandalism of the tsunami systems, and technical faults were also cited by the spokesperson of BMKG (Mereology, Climatology and Geophysical Agency) as reasons for the lack warning for the people in the affected areas.
Figure 4: Plumes rise from Mount Anak Krakatau as it erupts in the Java Strait, Indonesia on Sunday, December 23, 2018. A deadly tsunami followed an eruption and apparent undersea landslide on the volcano, gushing ashore without warning during a busy holiday weekend. (Source: Nurul Hidayat/Bisnis Indonesia via © 2018 The Associated Press)
Events like these demonstrate that assessing natural catastrophe risk is fundamentally complex. The specific characteristics or combination of characteristics, experienced in actual events, are unlikely to be replicated exactly within a model’s stochastic event catalogue. Whilst the models currently available are able to provide a credible long-term view of risk, they are unlikely to make appropriate allowances for all loss causing mechanisms and the subtle nuances of each individual event as observed in 2018. Multiple earthquake events, tsunamis generated from the submarine landslide, and the secondary effects such as liquefaction and landslide are all complex issues to model and resolve. Use of the models and the observations gleaned from such analyses need to be augmented with technical expertise and judgment. One approach to achieve this is to complement the full probabilistic view of risk from the models with a targeted and focused assessment of exposure to specific low probability events and/or studying the effect of specific secondary perils.
The insured losses in these events are expected to be low, very likely only a fraction of the total economic loss. These events have again highlighted the low insurance penetration often observed in emerging markets. The insurance industry, government, and scientific community need to continue to work together to develop more extensive insurance solutions that support the economic development of the region and benefit the wider community.