Boston’s AIR Worldwide Corporation announced that it has provided risk modeling and analytical services for more than 10 billion dollars in insurance-linked securities since 1996 and over 56 percent of total issuances since 2007.
“Risk modeling is a key element in the risk assessment of a catastrophe bond for issuers, rating agencies, and investors alike,” explained Augustin Gas, head of ILS and alternative retrocession at French reinsurer SCOR. He also praised AIR’s “superior methodology and modeling expertise.”
AIR’s bulletin added that it had “provided risk modeling and analytical services for 70 percent of the catastrophe bond capital issued. In 2009, AIR has been the modeling and calculation agent for all catastrophe bonds issued to date, including Atlas V, East Lane Re III Ltd. Series 2009-1, and Mystic Re II Ltd. Series 2009-1, totaling $575 million in new issuances.”
Erik Manning, director at Deutsche Bank added that the “Atlas V was the first catastrophe bond to come to market in six months and is the first in a new generation of cat bonds. AIR was also involved in last year’s pioneering Blue Coast Ltd. bond that used the recently developed LAZR (Long-Term Aggregate Zonal Reinsurance) hybrid trigger that combines state-level PCS® industry loss estimates and AIR’s model losses by county.”
AIR pointed out that it has “modeled the risk profile for securities covering North America, Europe, and Asia while protecting against such perils as tropical cyclones, earthquakes, extratropical cyclones (winter storms), severe thunderstorms and wildfires. These instruments employ a variety of trigger types, ranging from parametric, indemnity and PCS industry loss index-based to modeled loss, and also include hybrids such as the combination of PCS industry loss and modeled loss.”
AIR, founded by Karen Clark, who has since moved on to form her own company, was a pioneering venture when it started up in 1987. From modest beginnings the Company “today models the risk from natural catastrophes and terrorism in more than 50 countries,” said the bulletin. “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, agricultural risk management, and property replacement cost valuation.”
Source AIR Worldwide – www.air-worldwide.com
Topics Catastrophe Risk Management
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