Terrorism risk model expanded by AIR
In line with the evolving threat of terrorist attacks around the world, an expanded terrorism risk model has been announced by AIR Worldwide.
The model will allow insurers, reinsurers and others to test likely terrorist attack scenarios in 28 countries, including the US, Britain, France, Germany, China and Japan.
For instance, a target can be chosen and a weapon type selected, such as a truck bomb, and then run through the modelling program to estimate potential losses to insurance and workers' compensation policies.
The catastrophe risk modelling firm collaborated with a team of counterterrorism experts with experience working with the FBI, CIA, US Department of Defence and other government bodies, to incorporate updated and detailed threat assessments to estimate attack frequencies.
About 100 ‘trophy' targets associated with a higher probability of attack, and an expanded database of more than 64,000 potential targets, including US corporate headquarters, sports stadiums, prominent buildings and hotels, are featured in AIR's US Terrorism Model.
The Boston-based company said the Terrorism Model will help companies assess the impact of different attack scenarios on their portfolios and better manage their global terrorism risk.
“The AIR Terrorism Model now supports deterministic modelling of conventional weapon attacks in countries across the globe,” said Shane Latchman, assistant vice-president at AIR Worldwide.
“In addition, in this latest release, estimates of the frequency of attacks in AIR's probabilistic US Terrorism Model have been updated to reflect the current threat. Together, the updated model provides a comprehensive view of the global terrorism risk landscape.”
Explaining how the platform works, the company said: “Users can select a property from within their own portfolio, one of the targets in AIR's US landmark database, or any user-identified target and then select a weapon type, such as a truck bomb, to test ‘what if' scenarios.
“AIR has developed robust damage functions to help companies understand the impact on their insured exposures given the size of the blast and urban density indices. The loss estimation functionality complements existing accumulations management capabilities within Touchstone, including dynamic ring analysis, for property and workers' compensation exposures.”
AIR has integrated terrorism risk index maps from its sister company Verisk Maplecroft as a “hazard layer” into Touchstone. The indices provide an assessment of terrorism risk at a subnational level based on terrorism incident data and severity of attacks during a specific reporting period.
Rob Newbold, executive vice-president at AIR Worldwide, said: “Modelling this complex and dynamic global threat requires a comprehensive solution.
“A complete terrorism risk analysis must include three components: accumulations analysis, deterministic analysis, and probabilistic loss analysis. Touchstone offers all three.”