By: Luke Jones, Published on July 5, 2017 03:51 PM, Last Update on July 31, 2017 12:53 PM
A new hail risk modelling system has launched, but drawn mixed reviews from insurance companies.
AIR Worldwide’s modelling system is the first of its kind in the industry and is a probabilistic computer model that can assess the risk of hail. The system is supposed to offer a more complete risk assessment of potential hail storms.
Hail is a costly problem for insurance companies. Each year, companies pay millions of dollars in claims for vehicles and homes damaged by hail. The AIR model looks through 10,000 years of weather and climate history and creates a calculation based on when the next predicted hail storm will happen.
Some sinruance providers say the modelling system has potential, while other are less enthused.
Rodney Schoettler, CEO of Saskatchewan Municipal Hail Insurance (SMHI), argues that the system may not actually help, even though he is not opposed to its introduction. He says there is little reason to implement the system into his current model:
“We don’t really honestly care what the future will bring,” Schoettler explained. “If a model says two years from now it’s going to hail more so your risk is going to go up, we’re not going to respond today anyway. We’re still going to write it based on our experience.”