AIR Releases Updated U.S. Terrorism Model

AIR Worldwide has announced the release of its updated U.S. terrorism model, available in version 9.5 of its catastrophe risk management systems. The new model incorporates the results of two years of research into the effects of conventional bomb blast in complex urban environments. Since urban density can have a significant impact on the effects of a blast, AIR has enhanced its damage functions to account for the varying impact of bombs in relation to the density of properties in close proximity to better reflect the local building environment for all locations in the U.S.

"AIR's U.S. Terrorism Model can assist insurers in evaluating their terrorism risk and perform detailed loss analyses to identify high concentrations of potential loss in small areas such as city centers," says Jack Seaquist, senior manager at AIR Worldwide. "The model enables insurers to perform a probabilistic loss analysis that considers the full range of likely attack locations and weapon type combinations, estimates the losses, and assigns an estimated probability to each level of loss."

In addition, injury loss distributions implemented in the model have been updated to reflect the latest research from the medical community regarding trauma from terrorist bomb blasts. The distributions take into account injuries that result from damage to the building (airborne debris and collapsing building elements) and the direct effects of overpressure waves. The injury loss data in the updated model uses state average claim costs by injury type based on the latest three policy periods of historical claims, as reported to the NCCI. Benefits were brought to their current levels, and medical costs and wages were trended using regional indices.