Catastrophe risk modeller AIR Worldwide has released the industry’s first Australia severe thunderstorm model, offering re/insurers a comprehensive view of risk by incorporating the three sub perils of hail, tornado, and straight-line wind.
The new model simulates daily severe thunderstorms activity based on historical occurrence rates and local and seasonal weather patterns – capturing both severe events, producing insured losses in excess of $AUD 10 million, and smaller events that would impact a re/insurer’s portfolio on an aggregate basis.
Dr. Eric Robinson, manager and principle scientist, AIR Worldwide, commented; “In Australia, insurance losses from severe thunderstorms are greater than those from other natural perils such as earthquakes, tropical cyclones, bushfires, or floods.
“Because aggregate losses from severe thunderstorms can result in extreme volatility in financial results, a robust view of the risk is critical for organizations developing resilience strategies.”
The AIR model draws on Australia’s Bureau of Meteorology (BOM) Severe Storms Archive historical data, and combines information about atmospheric conditions conducive to severe thunderstorms with BOM storm reports data to offer companies a complete and accurate reading of their severe thunderstorm risk.
Robinson continued; “Loss potential is increasing as property replacement values rise in the densely populated cities of Australia, and the number of insurable exposures continues to grow as development expands into previously unpopulated areas.
“Insurers are looking for innovative tools that can help them better manage this growing risk by capturing the impact of both large and small loss-causing events, as well as accounting for the highly-localized effects of straight-line winds, hail, and tornadoes.
“Our new model does this by integrating statistical modeling with the latest meteorological research.”
The new severe thunderstorm risk model is available in the CATRADER® Version 19 and Touchstone® 5.0 catastrophe risk management systems.
AIR said in addition to releasing new and updated risk models, its Touchstone 5.0 has been freshly equipped with more streamlined multitasking and new options for generating and working with loss results.
