AIR Expands Suite of Catastrophe Models for Australia

July 24, 2012

Catastrophe risk modeling firm AIR Worldwide announced the expansion of its suite of catastrophe models for Australia “with the release of the industry’s first probabilistic bushfire model and updated tropical cyclone and earthquake models.”

Dr. Jayanta Guin, senior vice president of research and modeling at AIR Worldwide, noted that “AIR’s current suite of Australia models represents the results of a multi-year research effort aimed at serving the evolving risk management needs of the worldwide and Australian insurance industries. The events of 2011 — including the Queensland floods, Cyclone Yasi, and the bushfires near Perth — and the Victoria earthquake in May 2012 demonstrate Australia’s exposure to multiple perils. The AIR models for Australia provide a realistic and comprehensive view of catastrophe risk in this region.”

The AIR Bushfire Model for Australia — the newest addition to the suite — “captures the effects of bushfires on insured properties in the Australian mainland and Tasmania,” AIR said. “To determine the occurrence and severity of wildfires, the model considers fire ignition frequency and location, available fuels (vegetation), weather (seasonal conditions and wind characteristics), topography (the ground surface features that can affect winds), and fire suppression efforts. The model has also been through an extensive peer review.”

Dr. Guin pointed out that “bushfires in Australia are the natural product of the continent-wide aridity, frequent periods of drought, high temperatures, parched vegetation, and the recurrent strong, steady winds that are characteristic of the country.”

He also indicated that “many populated areas in Australia have conditions that are ideal for feeding fires, and Australia has suffered significant losses from such events — including the 2009 Black Saturday bushfires, which caused insured losses of more than A$1.3 billion [US$1.338 billion].”

AIR described its Bushfire Model for Australia as generating “demonstrably realistic scenarios of loss. It filters the roughly 10,000 continent-wide ignitions that occur in Australia every year down to the dozen or so that are likely to cause property loss — in line with the historical average. It includes a large and robust event set of simulated fires in the locations where they are most likely to occur and explicitly models the tendency of fires to occur in clusters. In addition, the model accounts for the seasonality of bushfires in Australia by region. To provide accurate vulnerability assessment, the model supports a wide range of construction types commonly found in Australia.”

AIR also said it has “made significant updates to all components of its tropical cyclone and earthquake models for Australia. In addition to a wide range of enhancements to the hazard components, both models now account for regional differences in construction practices, as well as building code evolution and enforcement. Both models also support property and business interruption losses to complex industrial facilities.”

The AIR Tropical Cyclone Model for Australia estimates losses separately for wind, storm surge, and precipitation-induced flooding. Other significant changes and additions include the following:
• a new 10,000-year stochastic catalog containing more than 116,000 simulated storms ranging from tropical low to Category 5 on Australia’s Bureau of Meteorology intensity scale
• a new, dynamic flood module for capturing precipitation-induced flooding
• a new storm surge module for capturing sea level rise along the coast caused by onshore winds of a cyclone
• new high resolution (1 km [0.625 miles]) land use/land cover data (near the coast) to estimate the local roughness of, and turbulence generated by, land and water surfaces
• updated damage functions that support a greatly expanded set of construction types, occupancy classes and lines of business, including pleasure boats and yachts (The damage functions have been validated based on loss experience data and findings from recent AIR post-disaster surveys.)

Changes and additions to AIR’s Earthquake Model for Australia include the following:
• a new, optimized 10,000-year catalog that incorporates the latest science and research on the earthquake hazard in Australia, including a novel approach for utilizing information on neotectonic faulting to estimate earthquake risk in this seismically stable region.
• a new liquefaction module covering major urban areas that have high liquefaction potential
• a new nationwide high-resolution (1 km [0.625 miles]) soil classification map (0.5 km [0.3125 miles] in regions of higher exposure) to better account for the potential amplification and attenuation of seismic waves caused by soil type
• Australia-specific ground motion prediction equations that assess the regional differences in seismic risk

The AIR Bushfire, Tropical Cyclone, and Earthquake models for Australia are currently available in Version 14.0 of the CLASIC/2™ and CATRADER® catastrophe risk management systems.

Source: AIR Worldwide

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