AIR’s groundbreaking methodology for assessing the vulnerability of corporate and industrial facilities to earthquakes is based on a rigorous, engineering-based analysis of the response of individual structures to seismic waves. An AIR site-specific analysis provides clients with detailed information on expected monetary losses as well as physical damage.

Seemingly similar commercial structures in close proximity to each other can respond quite differently to the same seismic event. Each will respond according to its unique structural configuration. The goal of an AIR corporate site-specific analysis is to estimate probability distributions of potential damage from future earthquakes and resulting monetary losses based on an engineering analysis of the facility combined with a scientific analysis of the underlying seismic hazard. AIR provides its clients with estimates of probable maximum and expected losses for building, contents and business interruption separately, as well as Exceedance Probability (EP) curves.

AIR’s approach to site-specific earthquake risk assessment, the Advanced Component Method™, or ACM™, captures a building’s response to earthquakes in a more realistic way than traditional techniques that rely on expert opinion and estimate monetary damage by multiplying estimates of the damage ratio by the replacement value of the building. Unlike traditional methods, ACM views individual buildings as unique and highly complex collections of individual structural and non-structural components and models the response of those components to the unique vibrational resonance between the building and incoming seismic waves. Nonlinear siesmic analysis is performed on a three-dimensional "virtual" representation of the modeled building using SAP2000, a highly reliable engineering software application. The benefit of ACM for companies using AIR's model is the ability to base risk management decisions on more refined loss estimates generated using a rigorous, engineering-based methodology.

ACM’s state-of-the-art cost model estimates the cost of repair of each damaged component. Repair costs will depend on regional price indices, construction practices, and appropriate repair strategies. Estimates of the monetary damage to each individual component are probabilistically combined to achieve an estimate of the monetary damage, or cost of repair, to the building as a whole given the degree of deformation produced by the modeled earthquakes. The use of hard data on repair and replacement costs ensures that an ACM analysis can be updated every year using the most current cost information available.