AIR Worldwide Corporation (AIR) today announced the availability of the
U.S. Hurricane Model for Offshore Assets. The new probabilistic model
will help insurers and reinsurers better manage hurricane risk to
offshore platforms and rigs in the Gulf of Mexico.
“The AIR U.S. Hurricane Model for Offshore
Assets leverages the proven strengths of AIR’s
U.S. Hurricane Model, which has been the industry standard for assessing
hurricane risk since it was introduced in 1987,”
said Dr. Paolo Bazzurro, director of engineering analysis at AIR
Worldwide. “The models share a single catalog
of simulated events that enables companies to assess potential losses
from individual hurricanes impacting onshore and offshore properties in
the U.S., the Gulf of Mexico and the Caribbean.”
One of the unique features of the AIR Model is that it explicitly models
the physical damage and estimates losses from wind and wave forces. “Physical
damage to offshore platforms in the Gulf of Mexico is caused mainly by
waves and wind; wind causes damage to the topside, namely to the deck
plus equipment, and the waves cause damage primarily to the structure
underneath the deck,” continued Dr. Bazzurro.
One of the challenges of modeling offshore exposures is lack of detailed
exposure data for these high value facilities. A significant component
of the AIR U.S. Hurricane Model for Offshore Assets is AIR’s
detailed database of the exposure at risk in the Gulf of Mexico. The
database includes 13 types of platforms and rigs. In addition to the
name, location, installation date and type of each platform and rig, AIR’s
exposure database also contains critical information for assessing their
vulnerability, such as the deck height, the number of legs and framing
system, the number of wells in operation, the number of decks, and oil
and gas production rates.
AIR’s exposure database includes nearly 6,000
platforms and rigs located in federal waters in the Gulf of Mexico, as
well as structures in state waters off of Louisiana. Replacement costs—an
essential input for accurate loss estimates—are
included for each single platform and rig. The replacement value of the
entire fleet in the Gulf of Mexico is approximately 78 billion U.S.
dollars.
The model supports policy terms common in the offshore market such as
Complex Single Limits, Sublimits, and Assured Interest. Supported
coverages include Physical Damage (PD), Business Interruption and
Contingent Business Interruption (BI + CBI), Operator’s
Extra Expense (OEE), and Debris Removal and/or Removal of Wreck (RoD
and/or RoW).
“The AIR Model includes the most
comprehensive database of platforms and rigs available in the industry
and explicitly estimates losses for the most significant coverages in
this market, which are responsible for the overwhelming majority of
insured losses,” according to Dr. Bazzurro. “Modeled
loss estimates for all coverages have been extensively validated against
approximately 50% of detailed claims data for Ivan, Katrina and Rita.”
The AIR U.S. Hurricane Model for Offshore Assets is available
immediately in AIR’s CLASIC/2™
and CATRADER® catastrophe risk modeling
applications.
About AIR Worldwide Corporation
AIR Worldwide Corporation (AIR) is the scientific leader and most
respected provider of risk modeling software and consulting services.
AIR founded the catastrophe modeling industry in 1987 and today models
the risk from natural catastrophes and terrorism in more than 50
countries. More than 400 insurance, reinsurance, financial, corporate
and government clients rely on AIR software and services for catastrophe
risk management, insurance-linked securities, site-specific wind and
seismic engineering analyses, and property replacement cost valuation.
AIR is a member of the ISO family of companies and is headquartered in
Boston with additional offices in North America, Europe and Asia. For
more information, please visit www.air-worldwide.com.
AIR Worldwide Corporation
Kevin Long, 617-267-6645
klong@air-worldwide.com
