Global insurer Chubb has partnered with Aon’s Impact Forecasting on a terrorism risk model, designed for deployment in dense urban environments such as Manhattan, that is able to distinguish between facade and structural damage as well as determine the likelihood that a building will collapse.
Risk modelling specialists from both firms set out with the aim of allowing for more realistic quantification of property and casualty losses than currently offered by available risk models.
The new model employees advanced computational fluid dynamics modelling techniques to simulate thousands of blast interactions with the surrounding three-dimensional building environment.
These simulations, which incorporate a range of uncertainties from explosive size to location, are then combined with a detailed engineering approach that considers the buildings’ structural resistance and performance from the perspective of anti-terrorism standards and progressive collapse design guidelines.
“Despite tremendous advances in the underlying science over the past few decades, the catastrophe models available to insurers remain outdated,” said Sean Ringsted, Chief Digital Officer and Chief Risk Officer at Chubb.
“That’s why we are so excited about our partnership with Impact Forecasting. By using the latest science and most sophisticated risk management tools, we gain unique insights into the risk profile in Manhattan. This will help us better assess and manage this critical exposure in our business.”
By identifying the type of damage projected to be sustained by each building and the injuries and fatalities associated with it, the model reportedly leads to more accurate estimates of property and workers’ compensation losses.
Cristina Arango, catastrophe risk consultant at Aon’s Impact Forecasting team added, “The new terrorism risk model for Manhattan provides an enhanced view of the terrorism risk.”
“We have developed an approach that can be applied to any city across the world, quantifying the effect of modelling uncertainties to highlight the variation of the possible impacts.”
“Our goal is to provide insurers with the insight and analytical tools to help them manage terrorism risk more strategically.”
