The Problems with PMLs

摘要

Probable Maximum Loss (PML), Scenario Expected Loss (SEL), and Scenario Upper Loss (SUL) earthquake damage estimates are being indiscriminately developed, used, and abused by the engineering profession and by the parties who commission and utilize PMLs. Owners may pressure engineers to obtain specific PML, SEL, and SUL values that they desire to meet insurance or lending requirements, and engineers often capitulate. Engineers use “black box” software and obtain either the desired values or values that are not representative of the actual structure. Black box software, which can “produce” PMLs at a small fraction of the cost required to actually understand the seismic behavior of the structure, has lowered the bar. Engineers who do not provide the desired values at a very low price tend to get cut out of the process. Meanwhile, the insurance companies and lending institutions, as third parties, blindly rely on the PML, SEL, and SUL values obtained by building owners to set insurance rates for the buildings in question or as the basis for deciding whether to issue financing -- setting up a clear conflict of interest on the part of the owners and the engineers. In some cases, building owners even appear to be using the PML, SEL, and SUL values to determine the policy limits for the property casualty insurance that they purchase, never realizing that the values are not appropriate for such a decision for an individual building. The authors examine the multitude of problems inherent in the PML, SEL, and SUL procedures being used by most of the profession, provide case studies, propose a more logical way of determining PML values, and present limitations and caveats for owners and other interested parties.