HailAUS: Australian Hailstorm Loss Model

Severe thunderstorms are a frequent and harmful natural disaster in Australia, causing significant damage. Since 1985, on average, more than half of the annual reported industry insured losses have been caused by severe thunderstorm events. Although large outbreaks can result in insured losses exceeding AUD 25 million, smaller events with lower losses can still impact a company’s portfolio on an aggregate basis or a more rural portfolio on an occurrence basis.

Risk Frontiers’ HailAUS model integrates statistical and physical modeling with the latest meteorological research and claims data to accurately capture severe thunderstorms with potential for causing loss across Australia. The model addresses reporting biases and climate change trends through a novel detrending approach that leverages radar and observation data.

The model also takes into account that a single storm can cause varying damage to properties within a portfolio, with updates to building codes impacting the vulnerability of structures. The component-based vulnerability framework of the model considers primary and secondary building characteristics, as well as every type of roof damage, to provide a location-level view of the risk.

The extensive validation of each component of the model against billions of dollars of claims data, damage surveys, engineering research, historical events, and industry experience ensures that an accurate view of the risk can be obtained to prepare for the next severe thunderstorm before it occurs.