24 July 2017Alternative Risk Transfer

AIR launches industry's first severe thunderstorm model for Australia

Catastrophe risk modeling firm AIR Worldwide, a Verisk Analytics business, has launched the industry’s first comprehensive severe thunderstorm model for Australia that explicitly captures all three sub-perils — hail, tornado, and straight-line wind - to help companies assess and manage severe thunderstorm risk.

"In Australia, insurance losses from severe thunderstorms are greater than those from other natural perils such as earthquakes, tropical cyclones, bushfires, or floods," said Dr. Eric Robinson, manager and principal scientist, AIR Worldwide. "Because aggregate losses from severe thunderstorms can result in extreme volatility in financial results, a robust view of the risk is critical for organisations developing resilience strategies."

The new model for Australia simulates daily severe thunderstorm activity based on historical occurrence rates and local and seasonal weather patterns. The daily simulation enables the model to capture both the large outbreaks that produce insured losses in excess of A$10 million, the ICA threshold for a catastrophe, and smaller events that may last only one day, but that could still impact a company’s portfolio on an aggregate basis, or a more rural portfolio on an occurrence basis.

Robinson commented: "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."

Don't miss our monthly insurtech email newsletter - sign up today

Today’s stories

UK government seeks to attract ILS market with new regulations

Liberty hires Ascot underwriter for casualty reinsurance

Howden snaps up Sterling Knight to expand Asia footprint

Brooks Insurance hires new vice president to expand markets

Did you enjoy reading this story?  Sign up to our free daily newsletters and get stories like this sent straight to your inbox.

Already registered?

Login to your account

To request a FREE 2-week trial subscription, please signup.
NOTE - this can take up to 48hrs to be approved.

Two Weeks Free Trial

For multi-user price options, or to check if your company has an existing subscription that we can add you to for FREE, please email Elliot Field at efield@newtonmedia.co.uk or Adrian Tapping at atapping@newtonmedia.co.uk


More on this story

Insurance
29 June 2017   The frequency and intensity of the most “strong to extreme” storms are expected to increase while projections also reveal that the earth is likely to see an increase in the frequency and intensity of most of the other weather phenomena including severe thunderstorms, wildfires, inland floods and coastal floods.
Insurance
24 April 2017   Catastrophe modelling firm AIR Worldwide, a Verisk Analytics business, has unveiled a cyber risk modelling application for the re/insurance market that will provide underwriters and risk managers with a variety of cyber analytics.