AIR Worldwide updates severe thunderstorm model for U.S.

Catastrophe risk modeler AIR Worldwide has announced an updated Severe Thunderstorm Model for the United States that includes enhancements to all model components – hazard, engineering and financial – meant to help companies better assess storm impact on their portfolios.

The peer-reviewed model has been developed to “provide companies with the high-resolution, detailed view of the risk needed to assess the impact of severe thunderstorm losses on their portfolios,” Scott Stransky, manager and principal scientist for AIR Worldwide, says in a statement Wednesday from AIR, a member of the Verisk Insurance Solutions group at Verisk Analytics.

AIR reports that the model – available in Version 2.0 of the Touchstone and Version 16 of the CATRADER catastrophe risk management systems – captures both the large outbreaks that produce insured losses in excess of US$25 million and the smaller events that may last only a day and produce much lower losses, but still impact a company’s portfolio on an aggregate basis.

Model enhancements are based on a decade’s worth of new data and scientific research, including damage data collected and analyzed by AIR scientists and engineers following major outbreaks in 2008, 2011 and 2013; approximately US$3 billion in insurance company claims; and additional analysis of billions of dollars of claims data from AIR sister company, Xactware.

“To effectively capture the risk that severe thunderstorms pose to insured properties across the United States, a catastrophe model should differentiate the risk to various assets by subperil (tornadoes, hailstorms and straight-line winds) and by primary and secondary building characteristics,” explains Cagdas Kafali, assistant vice president and principal engineer for AIR Worldwide.

The updated “model explicitly accounts for not only primary building features, construction type, occupancy, number of stories and year-built, but also many secondary features, such as hail-resistance category of the roof cover and other roof and building envelope characteristics,” Kafali continues.

The model “is realistic and represents the likely variability of intensity that will allow users to make better decisions about their exposure over a range of time horizons,” Dr. Harold Brooks, senior scientist at the National Severe Storms Laboratory, suggests in the statement.

“For hail, the model includes both the vertical fall speed as well as the horizontal component of wind speed to calculate impact energy. This is especially useful when estimating the amount of damage to building exteriors, such as siding and windows,” adds Timothy Marshall, PE, meteorologist and principal engineer for Haag Engineering.

AIR also announced Wednesday the release of what it calls the industry’s first fully probabilistic Crop Hail Model for the U.S., available in Version 16 of CATRADER. The model captures the effects of hail on insured crops, providing companies with a comprehensive view of their crop hail risk.

It features crop-specific damage functions – for corn, soybeans, wheat, cotton, rice and barley – that account for the unique damage mechanisms that hail imposes at various stages of each crop’s growth.