Catastrophe Loss Analysis Reports provide estimates of catastrophe losses for individual properties, taking into account specific attributes of the properties. The information, provided by AIR Worldwide, includes average annual loss amounts (expected losses), as well as estimated dollar amounts that have a 1 percent and 0.4 percent probability of exceedance (the 100-year and 250-year probable maximum loss). Analyses for hurricane and earthquake are available.
The Catastrophe Loss Analysis Report provides the following information for each peril separately and for hurricane and earthquake combined:
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Average Annual Loss |
The average loss expected to occur per year over a period of many years. Also called expected loss. |
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1% Probability of Exceeding (100-Year Loss) |
The loss amount that has a 1 percent probability of being equaled or exceeded in any given year. The industry also calls this the 100-year return period loss or 100-year probable maximum loss (PML). |
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0.4% Probability of Exceeding (250-Year Loss) |
The loss amount that has a 0.4 percent probability of being equaled or exceeded in any given year. The industry also calls this the 250-year return period loss or 250-year probable maximum loss (PML). (i) The average annual loss for the combined perils (hurricane and earthquake) is the sum of the average annual losses for the individual perils. However, you cannot add the loss amounts for the two perils at the 1 percent or 0.4 percent probability of exceedance together to yield the losses for the combined perils. That is because the probable maximum loss for the two perils is unlikely to occur in the same year. Visit www.air-worldwide.com/Models/Overview/ for more information on AIR’s approach to catastrophe modeling. If you have questions, please contact integrationsupport@air-worldwide.com. |