AIR Worldwide’s earthquake model for Colombia has gained insurance regulatory approval in the country.
The catastrophe modeling firm said that the model can now be used by domestic insurance companies in Colombia to help manage their earthquake risk. Specifically, the new approval allows local insurers to work directly with AIR Worldwide to get expert modeling services and direct access to models to meet regulatory requirements but also get a leg up on preparing for the next earthquake, AIR Worldwide Executive Vice President Rob Newbold said in prepared remarks.
According to AIR Worldwide, its new earthquake model rollout comes as the Colombian government has beefed up insurance regulatory policies, such as tying reserve capital to an analytical measure of a company’s exposure to catastrophic loss from earthquakes. Regulators now want domestic insurers to use an approved catastrophe model to calculate maximum probable loss and pure risk premium connected to each company’s portfolio.
The new AIR Worldwide model uses the latest scientific data and provides an integrated view of loss due to ground shaking tsunami and liquefaction. As well, it also features new damage functions for high-value industrial facilities, builder’s risk and public infrastructure to provide a comprehensive view of risk. Also, it allows for remodeling of historical events such as the 1999 earthquake that caused major damage to the city of Armenia, in Colombia’s coffee growing region.
AIR Worldwide is a Verisk Analytics business.
Source: AIR Worldwide