AIR Worldwide (AIR) has expanded its offerings for commercial insurers with a capability for determining losses from natural catastrophes to buildings under construction. CLASIC/2Version 14.0 introduces the ability to model builder’s risk policies for the AIR earthquake and hurricane models for the United States. According to the U.S. Census Bureau, in the first four months of 2012 alone, the total value of residential and nonresidential construction work on U.S. soil exceeded $238 billion.
“The catastrophe risk to buildings under construction is highly dynamic,” said Dr. Jayanta Guin, senior vice president of research and modeling at AIR Worldwide. “Both the vulnerability and replacement value change at each construction phase. By integrating vulnerability, cost, and seasonality for buildings of all construction and occupancy classes, the model accurately estimates the risk to buildings at each construction phase, from foundation and substructure to finish, and for the construction project as a whole.”
The vulnerability of a building to hurricane wind increases rapidly in the initial construction phases and then levels off after openings (windows and doors) are closed. The vulnerability of a building to earthquake ground shaking increases dramatically once the foundation and substructure are complete and then levels off after the addition of the lateral load-resisting system. AIR model users can estimate losses to builder’s risk policies (commercial and residential) that begin coverage after construction of a building has started by entering a “percentage completion” value into the software. The software also allows the full range of financial terms and conditions to be applied to such policies, which can vary significantly in terms of deductibles and financial structures.
AIR designed its CLASIC/2 Version 14.0 to support the complex policy conditions that characterize commercial insurance, enabling companies to assess catastrophe loss potential from the portfolio level down to the individual location level. The new builder’s risk capability follows on the heels of AIR’s software support for the construction all risks/erection all risks line of business in its models for the Asia-Pacific region.
AIR Worldwide (AIR) is aprovider of risk modeling software and consulting services. AIR founded the catastrophe modeling industry in 1987 and today models the risk from natural catastrophes and terrorism in more than 90 countries.
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