Guy Carpenter & Company, Inc., Marsh Mac’s global risk and reinsurance specialist, and catastrophe risk modeler AIR Worldwide Corporation, jointly announced an initiative to develop a detailed catastrophe model focusing on earthquake exposures in Switzerland.
“The fully probabilistic model will provide insurers and reinsurers with a powerful resource for quantifying loss potential at a detailed level,” said the bulletin.
“Though earthquake activity in this region tends to be less frequent and less severe than in some other European nations, Switzerland is a critical market from an economic perspective, and the loss potential from a significant seismic event is very high,” explained Jan Stormann, Managing Director and head of Guy Carpenter’s Munich office. “This will be one of the most advanced, sophisticated catastrophe modeling platforms available today, benefiting from the combined resources of our deep catastrophe market knowledge and AIR’s powerful models.”
Yorn Tatge, managing director of AIR Worldwide GmbH, observed: “This is an excellent opportunity to fill a critical need for insurers and reinsurers in the Swiss market, coinciding with the opening of our new Munich office. AIR’s model leverages Switzerland’s seismic history dating back to 240 A.D., including the 1356 Basel earthquake, which is among the largest earthquakes ever to strike Central Europe. AIR estimates that if the Basel earthquake were to recur today, total property losses will likely exceed 20 billion Swiss Francs [$13.26 billion].”
Additional features of the model include:
— A full probabilistic model with event set output and return period losses
— A hazard module implementing 26 seismic zones
— Incorporation of local attenuation relationships and soil conditions
— A vulnerability module comprising different damage functions for major Swiss lines of business and construction classes
— Geocoding for both detailed (longitude/latitude) and aggregated (cresta zones) data detail levels
Hanspeter Hilfiker, Senior Vice President and head of the Guy Carpenter office in Zurich, commented: “As a natural hazard, earthquake is not currently covered by obligatory insurance protection. The need to review the provision of earthquake insurance cover in Switzerland is currently a subject of discussion among Swiss insurers, driving demand for a detailed and high quality model for this economically important market.”
Additional information on the model can be obtained by contacting Max Strasser, member of Guy Carpenter’s Instrat(R) Team in Munich (Maximilian.Strasser@guycarp.com) or Yorn Tatge, Managing Director of AIR’s new Munich office (email@example.com).
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