A new modeling tool to help estimate losses based on climate forecasts will soon be available to carriers, according to AIR Worldwide.
AIR senior vice president Uday Virkud said that "anticipating the impact of current climate conditions can improve significantly seasonal hurricane risk assessment for insurers."
The tool will enable carriers to key in to locations where hurricane activity is most likely to deviate from the long-term average, he added.
The new risk modeling tool was developed in conjunction with Narragansett, R.I.-based Accurate Environmental Forecasting Inc. It uses AIR's loss modeling technology along with AEF's expertise in forecasting the climate's impact on hurricane risk, said Boston-based AIR.
AEF has developed methodology to determine the change in probable hurricane activity based on evolving atmospheric and oceanic conditions.
The AEF Hurricane Index reflects fluctuations in climate signals, such as the El Nino Southern Oscillation, the variability of sea surface temperatures in the tropical Atlantic, and the North Atlantic Oscillation, all of which can influence hurricane activity.
"Its development leverages more than 150 years of hurricane data from the National Hurricane Center's Atlantic Hurricane Database," AIR spokesman Mike Gannon noted.
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