Because of their uniqueness, complexity, or disproportionately high value, certain commercial and industrial exposures may not lend themselves to standard catastrophe modeling techniques. That’s why AIR launched Catastrophe Risk Engineering (CRE) Services, which provide key stakeholders with detailed site-specific, engineering-based risk assessments.
Quantify, Mitigate, Manage Catastrophe Risk
CRE assessments are designed to help companies across the insurance value chain more accurately quantify, mitigate, and manage their catastrophe risk exposures. Armed with the results of detailed structural engineering analyses coupled with AIR’s state-of-the-art catastrophe risk modeling, stakeholders can create a reliable, defensible, and transparent view of the true risk to exposed assets, while making informed decisions about financial and physical risk mitigation; insurance and reinsurance purchasing; minimizing uncertainty; and responding to changes in physical property, operations, and supply chain exposures.
Key Benefits of CRE Services
Corporate risk managers and financial executives
Can assist in structuring, managing, and communicating their catastrophe risk to shareholders, brokers, rating agencies, and underwriters.
Can use site-specific evaluations to reduce uncertainty surrounding their clients’ catastrophe risk and increase their value as advisors, obtaining a distinct competitive advantage—especially when serving clients with unique exposures.
Get a best estimate of an account’s true risk, which helps them price, structure, and negotiate complex or previously non-modeled risks with confidence.
CRE’s site-specific catastrophe risk evaluations can enhance traditional modeling solutions by significantly improving the quality and detail of the exposure information. Vulnerability is assessed using advanced computer modeling of individual structures. CRE Services also incorporate network modeling for more accurate loss analysis. Potential mitigation measures are evaluated based on cost-benefit analysis. CRE consultants can work with risk managers to address the need for emergency response planning, business continuity, and assess the risk from non-modeled perils, such as toxic waste clean-up.
Manage Global Supply Chain Risk
As the business environment becomes increasingly complex and interconnected, a company’s and its suppliers’ physical locations are exposed to multiple natural and man-made catastrophes worldwide. Earthquakes, hurricanes, floods, tornadoes, and terrorist attacks have the potential not only to cause direct damage to a company’s buildings, but also to disrupt its process and supply chains. Traditional methods for quantifying supply chain risk have considerable limitations. Site-specific, engineering-based assessments combine detailed network analysis with AIR’s catastrophe risk models. As a result, partial damage and downtime states for all nodes in the supply chain—e.g., production facility, supplier, or distribution center—can be simultaneously and explicitly considered. The level of disruption at each location from multiple perils is accounted for, providing a more realistic and reliable view of downtime and loss.
Listed below are additional materials of interest on the assessment and management of catastrophe risk: