A new version of AIR’s US hurricane model includes research linking sea surface temperatures to landfall activity
AIR Worldwide has announced the release of version 9.0 of its US hurricane model. The update features an enhanced methodology for estimating business interruption losses, which accounts for both building and business characteristics when estimating total business interruption downtime and includes indirect losses from sources other than physical damage to the insured building.
The release also includes enhancements to the model’s demand surge function, the vulnerability of residential contents and pool enclosures, and incorporates research by AIR meteorologists and climate scientists into the link between elevated sea-surface temperatures (SSTs) and US landfall activity.
“In the aftermath of the 2004 and 2005 hurricane seasons, which devastated wide swaths of the Gulf Coast and put countless businesses on hold for months or longer, AIR undertook an intensive research and development effort to improve the way catastrophe models estimate business interruption losses,” said to Dr Jayanta Guin, senior vice president of research and modelling at AIR Worldwide.
The new model has been validated using detailed claims data from 2004 and 2005 hurricane seasons. It also incorporates an additional 12 months of research into the link between elevated SSTs and US landfall activity. Rather than relying on highly uncertain point forecasts of sea-surface temperatures, the Version 9.0 near-term catalog is instead conditioned on the assumption that currently elevated SSTs are likely to remain elevated for the next five years.
As a result, the inclusion of one additional hurricane season will not significantly change estimates of near term risk. “Our ongoing analysis of billions of dollars of detailed claims data and our post-disaster survey findings provide valuable insight into the effects of hurricane force winds on insured properties,” added Dr Guin. “AIR will continue to use the most updated data and advanced modelling methodologies to provide our clients with the most scientifically credible catastrophe risk models available.”