AIR Worldwide Updates Terrorism Model for the U.S.
Catastrophe risk modeling firm AIR Worldwide (AIR) has updated its terrorism model for the United States to reflect less frequent and lower-severity attacks based on a reassessment of the threat by a team of terrorism experts.
The model is used by insurers and reinsurers to assess potential losses to property and workers compensation risks from terrorism incidents.
Jack Seaquist, assistant vice president at AIR Worldwide, said the AIR expert team considered the ability of a full range of terrorist groups to plan and accomplish a wide variety of attacks. “The update reflects the reduced capability for large-scale coordinated attacks in the United States from al-Qa’ida and its allies, as well as an increased reliance on lower-severity weapons requiring less expertise, training, and development,” he said.
In addition, the expert team considered recent studies published by the intelligence community, such as the 2010 study by the New York State Intelligence Center, which examined 32 terrorism plots (since 9/11) against the United States and compared the risk to various target types.
The AIR target/landmark database includes potential targets where attacks are likely to occur, was updated with more than 1,000 locations, including 181 prominent new buildings, 161 new corporate headquarters, 109 additional federal buildings, 33 new sports venues, and 424 new major hotels. The database consists of more than 300,000 landmarks; 100 of which are considered “trophy targets.”
The new model also reflects an updated assessment of the most vulnerable sectors, such as aviation, ground transportation, and economic infrastructure.
It also incorporates improved flexibility in handling terrorism exclusions and policy conditions. The model considers the impact of terrorist events caused by domestic and/or international groups, as well as from conventional and/or chemical, biological, radiological, and nuclear (CBRN) weapons and it applies terrorism policy exclusions, such as the pollution exclusion and the bacteria and virus exclusion.
AIR’s version also has the ability to determine the potential impact on policies that do not have coverage for terrorism (because the policyholders declined the mandatory offer under the Terrorism Risk Insurance Act) but are in Standard Fire Policy states that do not permit exclusions from any cause of fire and an updated workers’ compensation event frequency and injury benefit levels in different areas across the country.
The AIR Terrorism Model for the U.S. is currently available in Version 13.0 of the CLASIC/2, CATRADER, and CATStation catastrophe risk management systems.
Source: AIR Worldwide
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