Insurance Australia Group (IAG) has licensed AIR Worldwide’s new earthquake model to manage New Zealand’s catastrophe risk.
AIR, a business of Verisk Insurance, has developed the earthquake model to meet the wide spectrum of earthquake risk management needs of the insurance sector.
“This includes the capability to use two seismicity models for the region. One is a time-independent model (TID) with no memory of past rupture history; the other is a time-dependent (TD) model that considers historical or prehistorical ruptures of specific seismic sources,” said Dr. Milan Simic, executive vice president and head of global business development for Verisk Insurance.
“Also captured in the model are the effects from subperils, including ground shaking, liquefaction, landslide, transocean basin tsunami, and fire following earthquakes.”
Dr. Philip Conway, peril pricing manager at IAG, commended AIR’s “sophisticated earthquake model” and its ability to provide a scientifically credible view of risk.
“As the largest insurer in New Zealand, we pride ourselves on being able to differentiate between risks based on their location, building type, occupancy, age, and other parameters that drive vulnerability, as this allows us to manage our risk as well as provide the mechanisms to encourage mitigation in the community,” Conway said. “At the same time, having access to independent models such as AIR’s is of key importance to both our internal stakeholders and external partners.”
Ashish Jain, vice president and managing director of global business development for Verisk Insurance for Southeast Asia and ANZ, added: “Our collaboration with IAG has been ongoing for more than a decade, and we’re pleased that IAG has decided to leverage AIR’s new Earthquake Model for New Zealand to assist in managing their New Zealand risk.
“This relationship further strengthens our commitment to bringing new and updated solutions to the sophisticated insurance markets in Australia and New Zealand.”