First Chinese customer for AIR quake model

AIR Worldwide Corporation (AIR) has announced that PICC Property and Casualty Company (PICC P&C) has completed the first earthquake risk analysis using AIR's China earthquake model.

The company said that Guy Carpenter co-ordinated the analysis of the PICC portfolio, which represents more than 60% of the property/casualty insurance market in China. In addition to residential, commercial and industrial risks, the analysis covered construction all risks and erection all risks (CAR/EAR), an important line of business in the rapidly developing country.

"As our business continues to grow, it is essential that we effectively manage our risk from catastrophes," said Mr. Zhang Qing, General Manager of the Reinsurance Department at PICC. "Of particular concern is earthquake risk to our many CAR/EAR policies, which currently account for 40%-50% of our total earthquake exposure. AIR's sophisticated engineering-based approach to modelling buildings under construction has given us a better understanding of our risk."

"Modelling earthquake risk to buildings under construction is challenging because the vulnerability and replacement cost of the structure fluctuates," said Dr. Bingming Shen-Tu, AIR's technical project manager for China. "AIR has developed an objective, engineering-based approach that captures this time-dependent vulnerability of buildings under construction, from excavation to project completion."