Chubb partners with Aon to build Manhattan terrorism risk model
Chubb has partnered with Aon's catastrophe model development center Impact Forecasting to develop a terrorism risk model for Manhattan in New York City and other densely populated areas.
The risk model works by using advanced computational fluid dynamics to simulate thousands of different types explosive attacks against buildings in the area. The simulations are combined with engineering information about the buildings' structural resistance and performance from the perspective of anti-terrorism standards. From this combined data it is possible to differentiate between facade and structural damage, determine the likelihood of a building collapse and identify the injuries and fatalities associated with the attack.
Chubb said the model will lead to more accurate estimates of property and workers' compensation losses.
"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advances in the underlying science over the past few decades, the catastrophe models available to insurers remain outdated," said Sean Ringsted, chief digital officer and chief risk officer at Chubb.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."
Cristina Arango, catastrophe risk consultant at Impact Forecasting, said: "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."
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