AIR Introduces New Earthquake Catastrophe Model

June 9, 2000

Boston based Applied Insurance Research (AIR) announced a potential breakthrough in earthquake catastrophe modeling with the introduction of the”Advanced Component Method or ACM (TM).”

The computer technology uses new methods to assess “building vulnerability to earthquakes,” applying detailed engineering studies “to the broader portfolio of an insurance company’s risks.”

“Of primary importance to the insurance industry is the realism and accuracy that ACM brings to the loss estimation process. Because the measure of earthquake intensity used in ACM is directly linked to building performance rather than ground shaking, damage estimates produced by AIR’s model resemble much more closely those observed in the aftermath of actual earthquakes,” said the announcement.

Dr. Nozar G. Kishi, AIR’s Manager of Engineering Research, emphasized that an accurate analysis of buildings “as a complex collection of structural and nonstructural components that get damaged individually,” was a fundamental breakthrough in estimating potential losses from earthquakes.

“If a first floor column fails, the whole building comes down. But if a fifth floor column fails, the building would, in all likelihood, survive. The model’s ability to make such distinctions is critical to producing reliable loss estimates,” said Kishi.

AIR, with offices in Boston, London and Seattle, is a leader in providing catastrophe modeling services. Further information can be obtained on the company website at :

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