Catastrophe risk modeling firm AIR Worldwide announced it has released a severe thunderstorm model for Australia, which captures all three sub-perils – hail, tornado and straight-line wind – to help companies assess and manage severe thunderstorm risk.
The AIR Severe Thunderstorm Model for Australia simulates daily severe thunderstorm activity based on historical occurrence rates and local and seasonal weather patterns, said Boston-based AIR in a statement.
The daily simulation enables the model to capture the large outbreaks that produce insured losses in excess of A$10 million (US$7.9 million), which is the threshold for a catastrophe for the Insurance Council of Australia (ICA). In addition, AIR said, the daily simulation enables the model to capture smaller events that could last only one day, but could still affect a company’s portfolio on an aggregate basis, or a more rural portfolio on an occurrence basis.
Thunderstorm weather systems can last for several days and affect multiple states, but the individual tornadoes, hail swaths, and straight-line wind swaths (the sub-peril) that make up an outbreak may last for just minutes and affect highly localized areas.
To capture the localized effects, AIR developed high-resolution event footprints specific to each sub-peril. Additionally, because hailstorms, tornadoes, and straight-line windstorms inflict damage differently, the model’s damage functions are sub-peril-specific to provide more accurate loss estimates.
“The model also simulates realistically clustered severe thunderstorm outbreaks using methodology that groups hail, wind, and tornadoes into spatially coherent patterns – patterns that would not be possible using random sampling alone,” said AIR.
The AIR model utilizes historical data from Australia’s Bureau of Meteorology (BOM) Severe Storms Archive, which comprises storm reports from a trained weather spotter network.
“In Australia, insurance losses from severe thunderstorms are greater than those from other natural perils such as earthquakes, tropical cyclones, bushfires, or floods,” said Dr. Eric Robinson, manager and principal scientist, AIR Worldwide, which is a unit of Verisk Analytics.
“Because aggregate losses from severe thunderstorms can result in extreme volatility in financial results, a robust view of the risk is critical for organizations developing resilience strategies,” he added.
“Loss potential is increasing as property replacement values rise in the densely populated cities of Australia, and the number of insurable exposures continues to grow as development expands into previously unpopulated areas,” he went on to say.
He said that the model integrates statistical modeling with the latest meteorological research, which help insurers manage this risk by capturing the impact of both large and small loss-causing events, as well as accounting for the highly-localized effects of straight-line winds, hail, and tornadoes.
A new suite of models for Australia (including the severe thunderstorm model and updated models for tropical cyclone, earthquake, and bushfire) is currently available in the CATRADER® Version 19 and Touchstone® 5.0 catastrophe risk management systems. In addition to new and updated models, Touchstone 5.0 features a variety of enhancements to support more streamlined multitasking, and new options for generating and working with loss results.
Source: AIR Worldwide
Was this article valuable?
Here are more articles you may enjoy.