AIR Worldwide Provides Annual Global View of Risk
November 16 2020 - 5:04AM
Catastrophe modeling firm AIR Worldwide (AIR) today released its
2020 Global Modeled Catastrophe Losses report, detailing key loss
metrics from AIR’s global industry exceedance probability (EP)
curve. Based on the report, AIR estimates that the global modeled
insured average annual loss from catastrophes worldwide is nearly
USD 100 billion. The 1 percent aggregate exceedance probability
insured loss (or the 100-year return period loss) is nearly USD 301
billion. The 2020 report derives its loss metrics from the most
current suite of global property and crop models from AIR,
including new models and updates released during 2020 as well as
databases of property values for more than 110 countries; the
report excludes losses from AIR’s pandemic, cyber, and casualty
models. AIR Worldwide is a Verisk (Nasdaq:VRSK) business.
The global aggregate average annual loss (AAL) and exceedance
probability loss metrics for 2020 reflect changes in risk based on
AIR’s annual review of industry insured values around the world and
includes the impact of enhancements to the AIR Earthquake Model for
Australia, AIR’s Earthquake and Tropical Cyclone Models for the
Caribbean, and updates to the Hurricane and Inland Flood Models for
the United States.
“For regions and perils covered by catastrophe models, the
protection gap represents not only potential business growth
opportunities for the insurance industry to offer essential
protection to vulnerable home- and business-owners, but a
responsibility to act,” said Bill Churney, president at AIR
Worldwide. “Understanding the protection gap can also help
governments assess the risks to their citizens and critical
infrastructure, and develop risk-informed emergency management,
hazard mitigation, and public risk financing strategies to enhance
global resilience and reduce the ultimate costs from catastrophic
events.”
The report provides both global insured and insurable loss
estimates based on AIR’s global suite of models; the difference
between covered (insured) and eligible (insurable) exposures
suggests areas of potential profitable growth in markets already
identified as vulnerable to catastrophic events. Examination of
economic and insured losses reveals how wide the protection gap is
and how sizable losses can be for societies following a devastating
catastrophe. The year 2020 opened with the most powerful earthquake
Puerto Rico had experienced since 1918—the last time the island
updated its earthquake preparedness plan. Also in January, numerous
bushfires continued to burn across Australia. Since the second half
of 2019, the fires had scorched more than 10 million hectares (~25
million acres).
In June, one of the costliest natural disasters ever in Canada
struck on June 13: the Calgary hailstorm. August brought the
Complex Fire, which became the largest wildfire in California’s
history and the first-ever “gigafire,” so called because it burned
more than 1 million acres. On August 10, a derecho caused
widespread catastrophic damage in the Midwest, bringing heavy
rainfall, hurricane-force winds as well as significant hail in some
locations.
The Atlantic hurricane season has brought record-breaking number
of named storms impacting the entire coastline from eastern Texas
near the Louisiana border to the western Florida Panhandle.
“The ability for the global (re)insurance industry, financial
institutions, governments, and non-governmental organizations to
prepare for large losses before they occur is critical to continued
solvency and resilience,” said Rob Newbold, executive vice
president at AIR Worldwide. “With the insight provided by AIR’s
global suite of models, companies can pursue profitable expansion
in a market that is ever-more connected, and amid regulatory
environments that are increasingly rigorous. These holistic
analytics can give insurers and reinsurers greater confidence that
the risk they’ve assumed is risk they can afford to take.”
Download the 2020 Global Modeled Catastrophe Losses report here:
https://airww.co/GlobalEP2020
About AIR WorldwideAIR Worldwide (AIR) provides
risk modeling solutions that make individuals, businesses, and
society more resilient to extreme events. In 1987, AIR Worldwide
founded the catastrophe modeling industry and today models the risk
from natural catastrophes, supply chain disruptions, terrorism,
pandemics, casualty catastrophes, and cyber incidents. Insurance,
reinsurance, financial, corporate, and government clients rely on
AIR’s advanced science, software, and consulting services for
catastrophe risk management, insurance-linked securities, longevity
modeling, site-specific engineering analyses, and agricultural risk
management. AIR Worldwide, a Verisk (Nasdaq:VRSK) business, is
headquartered in Boston, with additional offices in North America,
Europe, and Asia. For more information, please
visit www.air-worldwide.com. For more information about
Verisk, a leading data analytics provider serving customers in
insurance, energy and specialized markets, and financial services,
please visit www.verisk.com.
###
For more information, contact:
Kevin Long
AIR Worldwide
01-617-267-6645
klong@air-worldwide.com
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