AIR enhances earthquake and typhoon models
AIR Worldwide (AIR), the catastrophe risk modelling firm, has significantly expanded and enhanced its earthquake and typhoon models for Southeast Asia.
The earthquake model features the ability to account for the tsunami and liquefaction sub perils for Indonesia, the Philippines, and Taiwan.
The typhoon model features a new precipitation-induced flooding module built using high-resolution data and also a probabilistic storm surge module for Hong Kong, the Philippines, and Taiwan.
The model domain has also been expanded to include the following countries and territories: Guam, Macau, Saipan, and Vietnam for typhoon risk; and Hong Kong, Macau, Vietnam, Singapore, Thailand, Brunei, and Malaysia for earthquake risk.
"As one of the largest primary insurers across Southeast Asia, it's in our best interest to use a comprehensive risk management tool to better understand and quantify natural catastrophe risk in this region," said Takuya Yano, head of the risk management team for the international supervisory department of Mitsui Sumitomo Insurance.
"We look forward to using AIR's models because their scope of model development covers not only updates to existing models but also includes expanded territories and countries, new lines of business, and new subperils such as tsunami and storm surge. We believe that the upcoming AIR models will give us new and valuable insights for addressing natural disaster risk in Southeast Asia."
Jayanta Guin, executive vice president and chief research officer at AIR Worldwide, added: "Southeast Asia has some of the fastest-growing economies. Located partly on the Ring of Fire, it's seismically one of the most active regions in the world, with earthquakes of magnitude 8.0 or larger occurring once every eight to ten years, on average.
"On the atmospheric side, more than 25 tropical cyclones typically form each year in the Northwest Pacific. A wealth of data has become available due to the number of catastrophes in this region, and AIR scientists have been conducting extensive research over the past ten years to better understand these events.”
“The results are enhanced catastrophe models that will provide insurers and industry stakeholders with the most advanced view of shake, tsunami, liquefaction, wind, precipitation-induced flooding, and storm surge risk in Southeast Asia."
Milan Simic, managing director of international operations at AIR Worldwide, said: "This has been one of our most comprehensive model expansions to date."
"We believe that our significant effort will provide clients with a better understanding of the risk and therefore a distinct advantage when writing business in this region. Furthermore, only a fraction of the total economic risk from natural disasters is covered by the insurance industry today, particularly in Asia.
“We're confident that the adoption of our innovative new models will help narrow the protection gap by providing the industry with the necessary tools to better understand and manage catastrophe risk in this part of the world."
