AIR Updates European Wind Storm Risk Model

Catastrophe risk modeling firm AIR Worldwide has released a major update to its Extratropical Cyclone Model for Europe.”Virtually every component of the model has been enhanced through the incorporation of significant quantities of wind speed observations and claims data from recent storms, coupled with state-of-the-art modeling techniques,” said the announcement.

“The update also incorporates the results of engineering studies that capture the effects of the regional building codes and construction practices on building vulnerability. Altogether, these enhancements represent a step advance in modeling European wind risk.”

Dr. Jayanta Guin, senior vice president of research and modeling at AIR, noted that the company had “pioneered the application of Numerical Weather Prediction (NWP) technology to realistically capture the complex structure of these storms that lead to more accurate surface winds, and now has more than 10 years of experience using NWP to model this peril. AIR’s fourth generation pan-European ETC model incorporates more physically realistic simulations of individual storms and explicitly models storm clustering to provide more credible occurrence and aggregate loss estimates.”

AIR also pointed out that it has “updated its catalog of simulated storms to better reflect the clustering of storms as they occur within a season. AIR scientists employed an innovative ‘block bootstrapping’ technique that employs historical data to generate more realistic simulated storm patterns than traditional approaches employed to model storm occurrence. As a result, the AIR model better captures the cumulative effects of multiple storms occurring in succession or concurrently over the same region, while more accurately modeling the impact of smaller individual storms.”

In addition it has enhanced “the model’s hazard module is the use of an advanced technique to translate wind speeds aloft to the surface, and has “developed damage functions for 30 different construction classes and nearly 50 occupancy classes.”

The new model also includes additional coverages and lines of business. “It features an enhanced methodology for estimating insured losses resulting from the interruption of business operations that takes into account such factors as the construction type and the occupancy class.”

Dr. Guin added that “each component was independently validated using multiple sources; for example, the distribution of each storm characteristic in the catalog of simulated events is carefully compared against historical storm data, and modeled wind fields are validated against wind speed observations from actual storms. Modeled losses have been validated using more than 3 billion Euros [app. $4 billion] of claims data from more than 11 historical storms spanning from 1990 to 2009.”

The AIR Extratropical Cyclone Model for Europe is currently available in Version 12.0 of CLASIC/2 and CATRADER(r) catastrophe risk management systems.

Source: AIR Worldwide