BOSTON, July 23, 2012 – Catastrophe risk modeling firm AIR Worldwide (AIR) has expanded its suite of catastrophe models for Australia with the release of the industry’s first probabilistic bushfire model and updated tropical cyclone and earthquake models.
“AIR’s current suite of Australia models represents the results of a multi-year research effort aimed at serving the evolving risk management needs of the worldwide and Australian insurance industries,” said Dr. Jayanta Guin, senior vice president of research and modeling at AIR Worldwide. “The events of 2011 — including the Queensland floods, Cyclone Yasi, and the bushfires near Perth — and the Victoria earthquake in May 2012 demonstrate Australia’s exposure to multiple perils. The AIR models for Australia provide a realistic and comprehensive view of catastrophe risk in this region”
The AIR Bushfire Model for Australia — the newest addition to the suite — captures the effects of bushfires on insured properties in the Australian mainland and Tasmania. To determine the occurrence and severity of wildfires, the model considers fire ignition frequency and location, available fuels (vegetation), weather (seasonal conditions and wind characteristics), topography (the ground surface features that can affect winds), and fire suppression efforts. The model has also been through an extensive peer review.
“Bushfires in Australia are the natural product of the continent-wide aridity, frequent periods of drought, high temperatures, parched vegetation, and the recurrent strong, steady winds that are characteristic of the country,” said Dr. Guin. “Many populated areas in Australia have conditions that are ideal for feeding fires, and Australia has suffered significant losses from such events — including the 2009 Black Saturday bushfires, which caused insured losses of more than AUD $1.3 billion.”
The AIR Bushfire Model for Australia generates demonstrably realistic scenarios of loss. It filters the roughly 10,000 continent-wide ignitions that occur in Australia every year down to the dozen or so that are likely to cause property loss — in line with the historical average. It includes a large and robust event set of simulated fires in the locations where they are most likely to occur and explicitly models the tendency of fires to occur in clusters. In addition, the model accounts for the seasonality of bushfires in Australia by region. To provide accurate vulnerability assessment, the model supports a wide range of construction types commonly found in Australia.
AIR also made significant updates to all components of its tropical cyclone and earthquake models for Australia. In addition to a wide range of enhancements to the hazard components, both models now account for regional differences in construction practices, as well as building code evolution and enforcement. Both models also support property and business interruption losses to complex industrial facilities.
The AIR Tropical Cyclone Model for Australia estimates losses separately for wind, storm surge, and precipitation-induced flooding. Other highlights include:
Highlights of the updated AIR Earthquake Model for Australia include:
The AIR Bushfire, Tropical Cyclone, and Earthquake models for Australia are currently available in Version 14.0 of the CLASIC/2TM and CATRADER® catastrophe risk management systems.
About AIR Worldwide
AIR Worldwide (AIR) is the scientific leader and most respected provider of risk modeling software and consulting services. AIR founded the catastrophe modeling industry in 1987 and today models the risk from natural catastrophes and terrorism in more than 90 countries. More than 400 insurance, reinsurance, financial, corporate, and government clients rely on AIR software and services for catastrophe risk management, insurance-linked securities, detailed site-specific wind and seismic engineering analyses, and agricultural risk management. AIR is a member of the Verisk Insurance Solutions group at Verisk Analytics (Nasdaq:VRSK) and is headquartered in Boston with additional offices in North America, Europe, and Asia. For more information, please visit www.air-worldwide.com.