BOSTON, July 21, 2014 — Catastrophe risk modeling firm AIR Worldwide (AIR) announced today that it has updated its Earthquake Model for Canada. The comprehensive update will provide insurers and other industry stakeholders with the most advanced tool for assessing potential losses from ground shaking, fire following earthquake, tsunami, liquefaction, and landslide for the Canadian market and will be a significant tool for compliance with OSFI Guideline B-9. AIR is a member of the Verisk Insurance Solutions group at Verisk Analytics (Nasdaq:VRSK).
“The updated Earthquake Model for Canada has been extensively reengineered and offers significant enhancements,” said Dr. Jayanta Guin, executive vice president, research and modeling, AIR Worldwide. “The model reflects an up-to-date view of seismicity based on the latest hazard information from the Geological Survey of Canada and collaboration with leading academics. In addition to the ability to estimate losses from shake, fire following, and liquefaction, the release is the first in the industry to include fully probabilistic landslide and tsunami models for Canada. Virtually every component of the updated model has undergone peer review.”
As testament to the sophistication of the model, Insurance Bureau of Canada selected AIR Worldwide to conduct the most comprehensive study of seismic risk in Canada ever undertaken. According to IBC, AIR’s study will help drive a national discourse on mitigation, financial preparedness, and emergency response.
“Based on their scientifically advanced modeling approach, IBC is confident AIR Worldwide was the right choice to undertake this important earthquake risk study for Canada,” said Gregor Robinson, senior vice president, policy and chief economist, Insurance Bureau of Canada. “We selected AIR after a competitive and rigorous RFP [request for proposal] process. AIR is respected worldwide as a provider of risk modeling software and consulting services, with expertise in undertaking such studies for a number of companies and organizations around the world. AIR has deep knowledge in catastrophe risk management, including the impact of earthquake and tsunami on properties and infrastructure, and has been a great collaborator on this project.”
“We are honored that IBC selected AIR to collaborate on this highly impactful and comprehensive study that will help raise awareness of earthquake risk throughout Canada,” said Dr. Guin. “It is a direct result of this collaboration that our newly updated Canada earthquake model provides the most complete view of seismic risk to residential, commercial, and industrial properties and infrastructure.”
The hazard component of the AIR Earthquake Model for Canada features a comprehensively updated seismicity model using the latest historical earthquake catalog from the Geological Survey of Canada (GSC), which has been shared with AIR ahead of the official release of the GSC’s national hazard map. AIR has also used paleoseismic and active fault data in western Canada and constructed a comprehensive kinematic model using GPS and other geodetic data to estimate the accumulation of seismic energy in the Cascadia Subduction Zone and in the shallow crust of British Columbia. This physically based model is especially useful for estimating the recurrence rates for rare, very large magnitude earthquakes and source parameters for earthquakes capable of producing tsunamis.
In rebuilding the Earthquake Model for Canada, AIR also took the opportunity to ensure consistency between the U.S. and Canada earthquake models. A unified stochastic catalog for both the United States and Canada was created to enable catastrophe model users to quantify the risk to policies and portfolios that span the border.
AIR has incorporated state-of-the-art ground motion prediction equations into the Canada model. Detailed geotechnical and microzonation studies of several metropolitan areas, including Ottawa, Montreal, Victoria, and Vancouver, are used to account more accurately for the impact of surface soils on ground shaking. Major updates to the vulnerability module have been undertaken in collaboration with local engineering experts and reflect a sophisticated understanding of regional building practices and the evolution of building codes. Damage functions for industrial facilities and infrastructure have been added.
Lastly, AIR has completely updated the industry exposure database, which features a resolution of 1 km nationwide, updated risk counts, adjusted construction costs and construction types, occupancy types, and policy terms.
The Earthquake Model for Canada is currently available in Version 2.0 of the Touchstone® and Version 16 of the 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.