New Report Illustrates Extreme Catastrophe Risk from a Global Perspective
Boston, Sept. 09, 2019 (GLOBE NEWSWIRE) — Catastrophe modeling firm AIR Worldwide (AIR) today released its 2019 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 about USD 92 billion. The 1 percent aggregate exceedance probability insured loss (or the 100-year return period loss) is nearly USD 288 billion, which is more than double the record losses seen in 2017 from Hurricanes Harvey, Irma, and Maria and other natural catastrophes. The 2019 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 2019 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 2019 reflect changes in risk based on AIR’s annual review of industry insured values around the world, which includes a complete update of its industry exposure database for New Zealand. The report also includes the impact of enhancements to the AIR Earthquake Model for New Zealand, AIR’s suite of inland flood models in Central Europe, and the AIR Typhoon Model for China.
“With the insight provided by AIR’s global suite of models, companies can pursue profitable expansion in a market that’s ever more connected and amid regulatory environments that are increasingly rigorous,” said Rob Newbold, executive vice president at AIR Worldwide. “The ability to take a comprehensive global view can give insurers and reinsurers greater confidence that the risk they’ve assumed is risk they can afford to take.”
Discussed in this year’s report are global economic losses from catastrophes, which can vastly exceed insured losses depending on the region and peril. This “protection gap,” the difference between economic and insured losses, highlights the significant burden that society faces when a disaster strikes. While the protection gap is often thought of as a problem confined to the developing world, the two earthquakes that struck Southern California in the first week of July—only 34 hours and less than 7 miles apart—highlight the fact that this issue can affect nations with highly developed insurance markets; statewide, only about 15 percent of California homeowners have earthquake insurance.
“While the global insurance industry continues to shine a light on the protection gap, our analyses indicate there’s still work to be done to address the disparity between economic and insured losses,” said Bill Churney, president at AIR Worldwide. “With modeled average annual loss at less than a quarter of the global economic estimate, we’re not seeing a significant narrowing trend. History has shown that higher insurance take-up allows society to recover more quickly from extreme events, and AIR will continue to work with the insurance and reinsurance industry, businesses, governments, and non-governmental organizations to reduce the protection gap.”
Newbold concluded, “With four months left in 2019, there’s still the possibility of experiencing significant insured losses. In 2018, the top three insured losses globally were caused by events that occurred after September 1: the Camp Fire, Hurricane Michael, and Typhoon Jebi.”
Download the 2019 Global Modeled Catastrophe Losses report here: https://airww.co/GlobalEP2019
About AIR Worldwide
AIR 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, terrorism, pandemics, casualty catastrophes, and cyber attacks globally. Insurance, reinsurance, financial, corporate, and government clients rely on AIR’s advanced science, software, and consulting services for catastrophe risk management, insurance-linked securities, 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.
Media Contact: Kevin Long AIR Worldwide 617-267-6645 firstname.lastname@example.org