Catastrophe modeling firm AIR Worldwide, a division of Verisk Analytics, announced that its earthquake model for Peru has been officially approved by Peruvian insurance regulator Superintendencia de Banca y Seguros (SBS) to offer catastrophe modeling services to local insurance companies in the region.
“Since 2005, Peruvian insurance companies have been required by the SBS 1305-2005 insurance resolution to contract with an SBS-approved catastrophe modeling company to have their catastrophe exposure quantified,” AIR explained.
“With this new approval, local insurers can work directly with AIR Worldwide and obtain expert modeling services to satisfy regulatory requirements while giving companies a distinct advantage in preparing for the next great earthquake in the region.”
AIR also noted that insurers in this region will be able to take advantage of its “suite of earthquake models for South America, specifically Peru. The AIR Earthquake Models for South America are the first catastrophe models for the region to provide an integrated view of loss due to ground shaking, tsunami, and liquefaction.
“Taking into account the way earthquake potential builds up over time, the AIR models apply a novel ‘time-dependent’ approach to account for the physics of recent earthquake ruptures and possible partial ruptures—yielding the most realistic view of seismic hazard available for Peru, Chile, Colombia, Ecuador, and Venezuela. In addition, the models feature new damage functions for high-value industrial facilities, builder’s risk, and public infrastructure to provide a comprehensive view of risk.”
Rob Newbold, Sr. VP for business development and client services-Americas, commented: “To protect the strong growth of South America’s insurance markets, regulators such as Superintendencia de Banca y Seguros are largely moving to establish model-based capital requirements more reflective of the actual risk faced by the region.
“We’re very pleased that AIR’s innovative earthquake model for Peru has been approved by SBS and will now be used to better manage risk and satisfy regulatory requirements that base capital reserves on probabilistic loss estimates.”
Source: AIR Worldwide
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