Property Division Executive at Lexington Insurance Companies. Sanjay, you have executive responsibility for the property division at Lexington. What does that involve?
SANJAY GODHWANI: Lexington Insurance Company is the largest excess and surplus lines writer in the United States providing insurance solutions for medical malpractice clients, casualty clients both on a primary and an excess basis, program clients and also property clients. I happen to be responsible for the property division. Within the property division we provide insurance industry solutions for mostly commercial customers ranging from real estate to health care, higher education, energy and manufacturing. We spend a great deal of time looking for solutions for catastrophic risk for our clients.
OSTERMILLER: Thank you. Now we turn to Roger Pielke Jr. Roger is professor of environmental studies at the University of Colorado Center for Science and Technology Policy Research. Roger, you founded the center in 2001. Can you tell us a little bit about the center?
ROGER PIELKE: I spent most of the 1990s working at the National Center for Atmospheric Research in Boulder, Colorado. That center has some of the smartest people in the world working there on weather problems, climate problems. I got to see first-hand how a lot of that excellent and wonderful science didn’t actually make it out the door into the hands of decision makers in the public sector and the private sector. So when I had a chance to move over to the University of Colorado to set up a center focused on bridging that interface between science and decision makers I jumped at it. We’re going on our 10th year now.
OSTERMILLER: Thank you. Our fourth panelist is Laurie Johnson. Laurie is Senior Science Advisor with Lexington with particular expertise in seismic activity. With the earthquake this week in Haiti and the near miss in California over the weekend everyone is focused on what can occur, what devastation can occur. We’re going to get into some specific questions in a minute about increased seismic activity. But first I wonder if you could just give us a little insight into what you do on your job?
LAURIE JOHNSON: Thank you, Marilyn, first of all, Lee as well. I joined Lexington this past year as senior science advisor. I’m working with Sanjay in the property division in helping them manage catastrophe risk and also advising the company overall on science-related issues like climate change, hurricane risk and other things. My background is in geophysics and urban planning. I’ve spent most of my career looking at large-scale catastrophic events, trying to understand them, the impacts and particularly the rebuilding process, how we plan for it and how we finance it.
OSTERMILLER: Thank you.
McDONALD: We’re going to do a segment on earthquakes. Then we’re going to talk about hurricanes. Then we’re going to talk about terrorism exposure. I’d like to take a moment to congratulate Mr. Perron of Willis for being the first person to send in a question for this webcast, which happens to do with earthquakes. We’ll get to that in a bit; it’s more about capacity and pricing.
Laurie, could you give us some context here? Obviously Haiti is on people’s minds. California is on people’s minds. One of the things we want to bring across in this discussion is reasonable extremes. People tend to think of the last event or what just happened, or think short-term. You, Roger, Brian are talking about long-term here. First start with the big picture. What’s your opinion at this point of the likelihood of extreme earthquake events, especially in the United States? How is that changing?
JOHNSON: When we think of earthquakes, we think of California. We think of events like the great 1906 earthquake and fire. But it’s important to realize that we could have damaging earthquakes in many parts of the country. I have a slide that shows a map released by the U.S. Geological Survey in 2008. It shows the seismic hazard across the nation. From the green to red shaded areas are really areas that have a 2% or greater likelihood of damaging ground motions occurring in the next 50 years. It’s a statistical thing that’s hard to understand but it’s really used for design purposes. It’s also the foundation of cat models. What I did on one of those maps is overlay some of the most recent and major earthquakes that have occurred across the country. These historic earthquakes help create those hot spots that you see on the map.
What you can see from that map is that there are events we know about. The 1811-1812 series that happened in New Madrid, you can see right in the middle of the country as a big hot spot. California has had a lot of historic earthquake. But also there are very large magnitude-nine potential earthquakes that can occur in the Pacific Northwest and in Alaska. Then also large earthquakes with magnitudes of six and seven that can occur in the Northeast. So it isn’t just a California problem. There is a likelihood of fairly large damaging earthquakes across the country.
McDONALD: What do the events in California and in Haiti tell us, things that you may have already known but most people don’t know?
JOHNSON: One of the things that frustrates everybody is that we really aren’t at a stage yet with the science to be able to do prediction. We’ve come a long way in understanding forecasting and being able to use tools such as geopositioning satellites systems and measuring strain accumulations on our major fault zones. We at least better understand where earthquakes are likely to be triggered, as we see these faults becoming “locked;” it’s a term we often use for that.
There are a number of places where that work has

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