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ARPC expands modelling with geospatial catastrophe model

ARPC has enhanced its two-dimensional geospatial catastrophe model to expand the region it can analyse and improve the way that insurance losses are calculated in the event of a terrorism incident.

ARPC is working with Risk Frontiers, a modelling firm that specialises in the assessment
and management of disaster risk across Australia and the Asia Pacific, and has achieved the
following enhancements:

  • expanding coverage beyond current Tier A locations to include Tier B and C locations
  • incorporating an “exclusion zone” effect to capture business interruption costs caused by business not being able to operate owing to access restrictions following a terrorism event
  • employing up-to-date imagery to faithfully represent the current situation on the ground, and
  • incorporating the shielding effects of neighbouring buildings on containing blast effects

The expansion of the model to capture all suburban and regional areas is vital in understanding the financial impacts of a terrorism incident that may occur beyond the CBD locations. In the event of an incident occurring, ARPC can run the model immediately to quickly estimate insured losses to infrastructure, assets and business interruption anywhere in Australia, including suburban shopping centres, mixed-use assets, industrial centres, sporting facilities and major infrastructure such as power stations and gas plants.

The geospatial catastrophe model also allows ARPC to model various scenarios prior to an incident occurring, to investigate the impact of exclusion zones on surrounding businesses. These insights have proved valuable to police in informing their own procedures.

Outputs from the model will include vulnerability curves, charts showing exposure and loss relative to sums insured and total loss by distance, as well as a list of the affected land parcels and associated sums insured and estimated losses.

The project went live at year end.