Akshay Gupta, principal engineer and director of the Catastrophe Risk Engineering practice at AIR Worldwide, told the NU Online News Service that a number of site-specific studies have been done in the past year.

"What we have learned is you can look at a facility from a 5,000-foot level or you can go to the ground level and look at what the facility is made of--it's got buildings, railway tracks, tanks--and everything has a unique risk signature to it," Mr. Gupta said.

He added that this risk signature has been put into models, with the idea that the user is able to construct the industrial facility within the model. This can be broken down, he said, into the types of assets at the facility.

For example, with a chemical plant on the Gulf Coast, he noted, "you would say I've got 10 percent of my value in buildings, 10 percent of the value in tanks, 5 percent in transportation equipment and 25 percent in electrical equipment."

To capture the risk accurately, he said, "you have to look at what is driving the risk at the component level. That's what we have done through the site-specific studies, and now that capability is available within the model as well. The user can break it down to whatever level they have the data for."

One of the criticisms of models has been that they "are a black box," with the contents and methodology not fully disclosed, he noted. "We're really opening up the models so the users can see where the information is coming from--real studies about how it's being applied and what they're getting at the end of the day," he said.

AIR noted its approach determines the overall damageability of various kinds of industrial facilities based on the damageability of the assets making up the facility.

Based on its studies, AIR created engineering-based damage functions for nearly 400 components and subcomponents (such as 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.

"Our site-specific studies provided us with a detailed understanding of the distribution of components by plant type, as well as differences in their physical characteristics and replacement values," Mr. Gupta added.

The upcoming version of AIR's U.S. hurricane and earthquake models will help provide better loss estimates when the user has data about the component make-up of a particular facility, he said. If detailed data on the facility is not available, the model will use default breakdowns based on the type of industrial facility, he noted.

By considering the interconnectivity between components in a variety of product chains, AIR said its enhanced methodology has also been extended to the assessment of business interruption loss for industrial facilities. Detailed, site-specific product and supply chain modeling is also available, AIR explained.

For more information, visit www.air-worldwide.com.