Chubb and Impact Forecasting are working on the model to enable more realistic estimates of property and casualty losses than are offered by current models, Chubb said. The new model is based on a state-of-the-art approach to blast engineering, and will provide more accurate insights into terrorism risk.
“Despite tremendous advances in the underlying science over the past few decades, the catastrophe models available to insurers remain outdated,” said Sean Ringsted, chief digital officer and chief risk officer at Chubb. “That’s why we are so excited about our partnership with Impact Forecasting. By using the latest science and most sophisticated risk management tools, we gain unique insights into the risk profile in Manhattan. This will help us better assess and manage this critical exposure in our business.”
The new model uses fluid-dynamics modeling techniques to simulate thousands of blast interactions with the surrounding building environment. The simulations, which account for a range of uncertainties including explosive size and location, are then combined with a detailed engineering approach that considers the buildings’ structural resistance and performance from the perspective of anti-terrorism standards.
This methodology allows the model to distinguish between façade and structural damage and determine the likelihood that a building will collapse, Chubb said. By identifying the kind of damage likely to be sustained by each building – and the likely injuries and fatalities associated with that damage – the model leads to more accurate estimates of property and workers’ compensation losses.
“The new terrorism risk model for Manhattan provides an enhanced view of the terrorism risk,” said Cristina Arango, catastrophe risk consultant at Impact Forecasting. “We have developed an approach that can be applied to any city across the world, quantifying the effect of modeling uncertainties to highlight the variation of the possible impacts. Our goal is to provide insurers with the insight and analytical tools to help them manage terrorism more strategically.”