Hi I’m Roger Grenier, and I lead the
Global Resilience practice at AIR Worldwide.
Let's talk about how catastrophe models
are used to estimate the economic impact of
extreme events like hurricanes, earthquakes,
and floods, to make our communities more resilient.
Since catastrophic events are so infrequent,
historical data is often insufficient for
making informed decisions.
There’s just not enough data.
Catastrophe models are widely used by insurers
and reinsurers to help weather the most extreme
events, ensuring they are able to manage their
risk and pay their claims.
Our models are built using the best
scienitific understanding of natural catastrophes
and how homes and businesses
respond to the impacts of these events, and
the models are informed by decades of data
from the insurance industry.
The models estimate how frequent and severe
future catastrophes are likely to be, where
they are likely to occur, and the damage they
can inflict
So when you enter information about assets
that are potentially in harm’s way, the
model will output a full view of possible
loss outcomes.
Instead of relying on limited historical experience
or a handful of scenarios, you get a complete
picture of risk from tens of thousands of
years of simulated activity, in no time at all.
The results allow you to not only visualize
the most at-risk areas, but to quantify the
damage and financial losses and estimate the
number of people affected.
You can even calculate the impact of mitigation features like hurricane shutters or flood walls.
Catastrophe models were originally created
for the insurance industry—but their use
has expanded dramatically.
Today, government and other public organizations
rely on our models to provide risk-based and
data-driven solutions to prepare for and recover
from catastrophes.
Model output can be used to inform disaster financing initiatives, risk transfer
to the capital markets, evaluate risk mitigation
investments, and much more.
To learn more about catastrophe models, please visit our website.
