Catastrophe risk modeller AIR Worldwide has added a severe thunderstorm model to its suite of products for Australia, as potential losses from such events increase.

The model, which captures hail, tornado and straight-line wind, simulates activity based on historical occurrence rates and local and seasonal weather patterns.

“In Australia, insurance losses from severe thunderstorms are greater than those from other natural perils such as earthquakes, tropical cyclones bushfires or floods,” Manager and Principal Scientist Eric Robinson said.

“Loss potential is increasing as property replacement values rise in the densely populated cities of Australia, and the number of insurable exposures continues to grow as development expands into previously unpopulated areas.”

The model uses data from the Bureau of Meteorology Severe Storms Archive, which comprises reports from a trained spotter network, along with a hybrid physical-statistical method to simulate weather events.

“Because aggregate losses from severe thunderstorms can result in extreme volatility in financial results, a robust view of the risk is critical for organisations developing resilience strategies,” Dr Robinson said.

AIR has also updated its Australian models for tropical cyclone, earthquake and bushfire.