AIR Releases Terrorism Loss Estimation Model

September 4, 2002

Boston-based AIR Worldwide, which is now a subsidiary group within the ISO, announced the release of the “AIR Terrorism Loss Estimation Model.”

“The new catastrophe model, the first commercially available probabilistic model of its kind, can estimate the financial impact of insured property and workers’ compensation losses from potential future terrorist attacks in the United States,” said the company.

AIR described the model as analyzing “various threats posed by domestic extremists, formal international and state-sponsored terrorist organizations and loosely affiliated networks. It examines the full range of potential conventional attacks, including air crash and bomb blast, and their impact on insurers’ and reinsurers’ books of business.”It is also “examining non-conventional weapons including chemical, biological, radiological and nuclear.”

Karen Clark, president and CEO of AIR stated that “Exposure to terrorism is a significant risk and the lack of comprehensive and affordable terrorism coverage is hurting U.S. businesses.” She indicated that “The problem is the current uncertainty about coverage, exclusions and price.”

AIR said that the model would help insurers and reinsurers to “quantify their risks, assess coverage and exclusions, estimate financial impact of attacks, support pricing decisions and improve overall portfolio management.”

More information is available on the AIR website at:

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