Filed Under:, Enterprise Risk Management

AIR Expands Solutions to Include Supply Chain Risk Quantification

Risk modeler AIR Worldwide says it has worked supply-chain-risk quantification into its set of Catastrophe Risk Engineering solutions.

“The catastrophe-risk-to-supply-chain networks came into focus following the volcanic eruption in Iceland in 2010. Just one year later, awareness of this risk was heightened further by the Tohoku earthquake and tsunami in Japan, as well as the major flooding in Thailand,” says Akshay Gupta, director ofAIR’s Catastrophe Risk Engineering (CRE) practice, in a statement. “While the catastrophe-risk-to-supply-chain network is quite complex, it can be effectively quantified. Once completed, the work involved to quantify this risk can also help expand risk assessment to other non-catastrophe perils.”

AIR says its new product offering, announced today at the 50th annual Risk and Insurance Management Society (RIMS) conference in Philadelphia, will allow risk managers to more accurately assess and reduce risk to supply chains—from physical damage and contingent business interruption—due to perils such as hurricanes, earthquakes, floods, tornadoes, and tsunamis. Network vulnerabilities along the supply chain can be seen clearer, says AIR, and corporations can consider different mitigation measures to improve supply chain resiliency following a catastrophe.   

Supply chains have multiple, linked operational points, or “nodes.” While there has been work to quantify physical damage along the supply route, there has been no approach to account for the impact of a disruption to simultaneous multiple points, or a partial shutdown along the chain. The model also works in the likelihood or frequency of shutdown to points along the supply chain, adds Gupta.

“AIR’s CRE solutions combine a detailed network analysis with catastrophe risk models,” says Gupta. “As a result, partial damage and downtime states for all nodes can be simultaneously and explicitly considered. CRE solutions also account for the level of disruption at each location from multiple perils. By quantifying the impact of these disruptions on the overall supply chain network, CRE solutions provide a much more realistic and reliable view of downtime and loss.”

Featured Video

Most Recent Videos

Video Library ››

Top Story

10 insights into how small-business owners perceive cyber risk

Cyberattacks on small businesses are a real and growing problem, and the latest research by Nationwide shows owners are not prepared. Insurance agents can help.

Top Story

Friday's cyber attacks a 'wake-up call' for insurers and public alike

Waves of DDoS attacks shut down swatches of the internet on Friday, prompting the need for the insurance industry to issue standard cyber liability coverage forms.

More Resources


eNewsletter Sign Up

PropertyCasualty360 Daily eNews

Get P&C insurance news to stay ahead of the competition in one concise format - FREE. Sign Up Now!

Mobile Phone

Advertisement. Closing in 15 seconds.