NatCat modelling

#####The probabilistic model behind the ECA methodology step 2

• Hypothetical portfolio containing 1'000 assets (buildings). We assume that the risk assessment tool only contains 12 potential events over a projected period of 200 years.
• The hazard module generates the expected intensity (VII) for event no.1 at asset no.1.
• The damage function provides us with the mean damage ratio (MDR) for given hazard intensity (4 stands for 4% of the asset's value). Multiplication of MDR and asset value (1'000'000) results in damage (40'000).
• Above steps are performed on all 1'000 assets in the portfolio. The sum of all damages produces the total damage from event no.1, i.e. event damage no1.
• All above steps are then repeated for the other (11) events in the event set.
• Upon completion of all these stages in the modeling process, a list of all event damage is produced, upon which damage statistics can be derived (average damage, max damage…). Source of concept: Swiss Re, Natural catastrophes and reinsurance

#####Example: Hurricane Sidr affects Bangladesh Hurricane Sidr affects Bangladesh, modelled with the open source natural catastrophe model climada. climada (climate adaptation) is the tool to conduct the Economics of Climate Adaptation (ECA) methodology.