Boston-based AIR releases new catastrophe models for Asia-Pacific

AIR Worldwide Corporation, the Boston-based catastrophe modelling and weather risk management company, today released new typhoon and earthquake models for the Asia-Pacific region. The new typhoon models include Taiwan, Hong Kong and the Philippines, while the new earthquake models cover Taiwan, the Philippines and Indonesia.

The new AIR earthquake models incorporate the seismological and tectonic information from more than 350 stations operated throughout the region. The new tropical cyclone models incorporate data on more than 1,250 historical tropical cyclones in the northwest Pacific Ocean between 1955 and 2000.

"The Asia-Pacific region is an extremely active part of the world in terms of both seismic and tropical cyclone activity," said Neil Wiseman, managing director of AIR in London. "As the primary and reinsurance markets in Asia continue to develop, managing catastrophe risk will become increasingly important.”

Indeed, the Asia-Pacific market is becoming an increasingly important area for the issuance of catastrophe bonds, and for weather derivatives. In its annual survey, the Weather Risk Management Association found that 445 weather derivatives contracts, worth $90 million, were traded in Asia last year – an increase of 304% and 100% respectively over the 2000/2001 figure. The Asian market has also been the beneficiary of weather risk innovation, market participants noted, with the launch of typhoon derivatives by Japan’s Tokio Marine & Fire Insurance earlier this year.