NU Online News Service, March 30, 2:00 p.m. EDT

Catastrophe modeling firm AIR Worldwide (AIR) says it has released an enhanced typhoon model for the Northwest Pacific Basin.

The model, in Version 12.5 of AIR's CLASIC/2 and CATRADER software, features a catalog of simulated storms to provide a view of typhoon risk affecting Japan, mainland China, the Philippines, Hong Kong, Taiwan and, with this latest release, South Korea, AIR says.

"More than half of all typhoons in the Asia-Pacific region impact more than one country," says Jayanta Guin, senior vice president, research and modeling, at AIR Worldwide. "The updated basin-wide catalog will allow insurers and reinsurers to more accurately model losses to policies and portfolios that span multiple countries, thereby capturing loss correlations in a physically realistic way."

Precipitation-induced flooding can be a significant component of insured typhoon losses in the region. For example, Typhoon Tokage in 2004 resulted in 187 billion Japanese yen ($2.25 billion) in insured losses in Japan, and more than 40 billion Japanese yen ($482 million) of the total insured losses came from flood alone.

In Version 12.5 of CLASIC/2 and CATRADER, precipitation-induced flood damage is explicitly modeled in all supported countries. Additionally, AIR says, in CLASIC/2, users can assess their losses in Japan separately for wind and flood or for the two perils combined.

A significant amount of property claims data from insurers and reinsurers in each of the local markets in Asia was analyzed, and the findings from this data were used to test and validate the new models to reflect actual events in the region more accurately, AIR says.