AIR takes enhanced approach to modeling catstrophe damage to industrial facilities

AIR Worldwide (AIR) is offering enhanced capabilities to help insurers, reinsurers, brokers and risk managers better assess the catastrophe risk to industrial facilities. A new component-based approach is designed to estimate property and business interruption losses to a wide variety of industrial facilities due to hurricanes, earthquakes and other natural catastrophes. “AIR conducts detailed, site-specific, engineering-based risk assessments for various types of industrial facilities through our Catastrophe Risk Engineering (CRE) services,” said Dr. Akshay Gupta, principal engineer and director of the CRE practice at AIR Worldwide. “The in-depth knowledge gained from these assessments is now embedded in our catastrophe models to provide companies with a more detailed and complete view of risk to single facilities and large portfolios comprising a diverse set of facilities types and sizes.”Larger, more complex industrial sites have various components that may behave very differently from one another when subject to the same hurricane wind speed or level of earthquake-induced ground shaking, AIR notes. For example, components such as flares, process towers or cooling towers may sustain fairly significant damage at a particular wind speed, while pumps, transformers or anchored tanks may remain almost unscathed.  AIR’s component-based approach predicts the overall damage to various kinds of industrial facilities based on the damageability of the assets that comprise the facility. Based on its CRE studies, AIR created engineering-based damage functions for nearly 400 components and subcomponents — for example, anchored and unanchored tanks with varying height-to-diameter ratios and fill levels — and the distribution of such assets in different types of industrial plants.