Aon Re Australia has followed in the footsteps of other western countries in trying to assess the financial implications of terrorism in their own backyard. Its new modeling tool uses a geographical comparison to estimate a company’s potential losses arising from terror attacks. It focuses on commercial, government, infrastructure, transport, schools and other public places.

Aon Re Australia CEO Malcolm Steingold told Sunrise Exchange News he “doesn’t expect there will be big take-up” on the product initially, but clients will benefit greatly from the tool.

“We believe that there is capacity in the private reinsurance market to cover these risks,” he said.  “This latest capability provides a tool for companies to plan for such disasters, providing greater certainty at a time when companies are investing in business continuity and disaster planning as an important part of corporate governance.”

Focusing particularly on publicly listed companies, losses are determined on simulated “attack modes”, such as explosives, radiological, biological, chemical and nuclear weapons. The model was developed taking into account similar models being used in the US and UK.