The news went around the world: Chile suffered a devastating earthquake on Saturday, February 27th, 2010. The quake came to 8.8 on the Richter scale, the fifth strongest quake ever measured. Only a week later, Ray Hogendoorn, Claims Adjuster at AGCS, and Wolfgang Goschenhofer, Risk Consultant at AGCS, got on the first commercial flight from Europe to Chile in order to assess the situation on site.
Initial response to earthquake in Chile
March 11th 2010
4:30 a.m. First call from the "home base" in Munich and Claims Adjuster Ray updates the troops on the ground. Immediately after the quake had taken place, an "AGCS Emergency Response Team" consisting of engineers, loss adjusters and internal staff was formed. This team then quickly decided that they needed to be on site in the region in order to assist the client with specific expertise.
Ray has been in Chile for four days now and has already adapted to the time change but apparently the colleagues in Europe sometimes forget about that and get him out of bed quite early.
5:00 a.m. Since he is awake now anyway he might as well take a look at his emails that are piling up. A client from Italy might have losses in Chile but hasn’t been able to get any further specifications on the situation. The AGCS contact has been informed that Ray and Wolfgang are in Chile and is thus reaching out to them for help. Ray tries to dig up all the information he can find and researches as far as possible by calling his contacts at different loss adjusting companies. In this particular case, it’s good news and he finds out that there is no damage for the client. Ray’s job is mainly gathering information – after such a bad quake everything is unclear and destabilized. Overall Ray has received 30 to 40 reported claims in Chile. There are large European and American based companies such as Südzucker, Cintra and others.
Chile particularly susceptible to earthquakes
7:00 a.m. At the breakfast table in the hotel, Ray meets Wolfgang who has been doing some research on the history on earthquakes and tells Ray that the worst one ever measured actually took place in Chile as well. 1960 in Valdivia: 9.5 – the death toll estimates range from 3,000 to 6,000 and the monetary damage was estimated at $3 - 6 billion (adjusted for inflation). Chile is located in a highly seismic region, and its inhabitants have learned to live with the quakes.
8.00 a.m. The two Allianz representatives meet up with the rest of the group: claims adjusters for the AGCS client Cintra, a major private developer of road infrastructure worldwide. AGCS is cooperating closely with the loss adjusters from Crawford who has also flown in representatives from Europe and the US. They briefly discuss the route for today – after having driven 900 km down the coastline within 16 hours on their first day in Chile, Ray and Wolfgang are already quite used to the countryside of this vastly stretched country (Chile is more than 4,000 km long but on average only 175 km wide).
Now they are on the way back to the capital Santiago de Chile. Most of the highways are out of order, forcing them to turn off the main road every now and then past a landscape of destroyed bridges, viaducts and road surface. There are minor damages such as displaced bridges and viaducts (up to more than 50 cm). There is also surface failure to pedestrian overhead crossings, everything from small cracks to a complete collapse of over 2.000 meters. And some bridges and viaducts are now but a pile of wreckage.
East of Conception many steel grain silos collapsed, and the teams hear from other loss adjusters that the city of Conception is still a no-go area where the army seizes control of the city after 6 p.m. and most shops are closed, making food a short supply.
11:15 a.m. After driving for a couple of hours the group stops at a damaged bridge and is just checking the extent of the damages when the earth starts shaking again – everyone immediately knows that this is not just a small aftershock but actually a proper earthquake again. Later they learn it measured 7.2. and took place only shortly before the new president Sebastién Piñera was sworn into office (see below) in Valparaíso where the tremble could be felt quite clearly.
Ray comments: "First you don’t really know what’s going on but then the fear creeps up inside you and you just start running. We are just trying to get off the bridge as quickly as possible thinking that it might collapse any second. Fortunately it doesn’t and we all escape with a shock."
4 p.m. Meeting with the client and broker in order to assess the risks of the new section of the Highway 5 in Santiago. It seems that the situation is stabilized and all necessary emergency measures have been authorized.
Learning to adapt
6 p.m. Back in Santiago de Chile the group checks into the hotel. Ray is assigned a room on the 12th floor. Normally this is no problem for him but after experiencing such a quake he briefly considers refusing but then decides that it is important to face his fears. What if there is another quake? He keeps on feeling tremors, not knowing whether they are actually taking place or whether he is just imagining the earth is shaking again.
Still, Wolfgang and Ray find it fascinating that there has been far less damage than they would have expected in the capital. This is probably due to the fact that the government has introduced strict building codes. The first codes were established back in 1935. After an earthquake with a magnitude of 7.8 in 1985 the codes were revised, and in 1996 they were updated again. The current code stems from 2003. These building codes are applied especially to important buildings, and architects and government officials are well-prepared in case of an emergency. Yet, the question remains: can you ever be prepared for a natural catastrophe with such huge implications?
The local population in Chile is a good example: they have simply learned to live with the earthquakes. The national spirit in Chile is summed up by the slogan “Vamos Chile”. Many drivers have painted this motto on their car window screens. Giving up is not an option for them. Chile is an upcoming, very vibrant society and a great future lies ahead of them.
Facts about the quake
• 8.8 magnitude
• Saturday, February 27th 2010 at 3:34 a.m.
• Epicenter off the coast of the Maule Region, 95 km northwest of Chillan, 105 km northwest of Concepción and 335 km south of Santiago de Chile
• Depth (hypocenter): 35 km
• Duration: 45 to 100 seconds
Facts about Cintra
One of the world’s leading private developers of transport infrastructure with its business activities focusing on the toll highway market. More than 35 years of experience managing toll highways in Spain, Portugal, Ireland, Greece, Canada and US as well as Chile: over 2800 km and a total investment of more than € 16 billion.
Cintra operates five concessions in Chile
• Santiago – Talca: 237 km (100 % owned)
• Talco – Chillán: 193 km (67.6 % owned)
• Chillán – Collipulli: 161 km (100 % owned)
• Collipulli – Temuco: 144 km (100 % owned)
• Temuco – Río Bueno: 172 km (75 % owned)
The Future of Chile
The new president Piñera announced shortly after the earthquake that the reconstruction would help Chile make the step from emerging to developed country within the coming decade. In addition to the loss of over 500 lives, the president estimates the damages to come to $ 30 billion which equals about 18 percent of Chile’s gross domestic product (GDP), and he acknowledges that the reconstruction will be a challenge. However, he does not feel that this will influence the positive development that the country has undergone in the past years. The country in the middle of the Andes is one of Latin America’s most dynamic economies and was the first South American country to become a member of the Organization for Economic Cooperation and Development (OECD) in May 2010. In order to really make the step from an emerging to a developed country, Chile will need to overcome its dependency on copper exports. Currently almost half of the country’s exports consist of this valuable material and thus accounts for a large share of Chile’s wealth. The president has called for his people to consider the earthquake an opportunity not only for economic but also environmental improvements. When rebuilding the infrastructure it will be easier to ensure that sustainability issues are taken into account. Chile estimates it will have to rebuild around 200,000 houses and apartment buildings as well as hundreds of streets and bridges after the earthquake.