Aon Re has developed a comprehensive Earthquake Viewing Guide following the success of the Hurricane Viewing Guide, which was utilised by insurers during the 2004 and 2005 hurricane seasons.
The viewing guide provides a range of potential loss outcomes based on possible earthquake events throughout the US.
It also provides exposure summaries and probable maximum-loss outcomes for given ranges of magnitudes in earthquake-prone regions.
Aon said that the tool will enable insurance companies to utilize a unique methodology to assess earthquake loss potential.
The Earthquake Viewing Guide can also assist in making decisions regarding exposure accumulation, reinsurance capacity decisions and capital utilisation.
Jeremiah Konz, vice president and managing director, Aon Re Services, said: "Throughout the 2004 and 2005 hurricane seasons, clients utilized our Hurricane Viewing Guide as storms approached the United States coastline to quickly and easily determine potential loss scenarios without having to re-run catastrophe models.
"The resounding success of the Hurricane Viewing Guide has had numerous insurers clamoring for a similar product for the earthquake peril."
Dan Dick, executive vice president, Aon Re Services, said: "The beauty of the Earthquake and Hurricane Viewing Guides is that they utilize the potential loss severity as determined by the various catastrophe models, but remove the underlying frequency.
"This allows the user of the guide to make decisions, not based on the subjective probability provided by a modeling firm, but rather by determining how severe the loss could be given a certain event occurs.
"The past two hurricane seasons have put the various catastrophe models under a lot of scrutiny. These guides remove one of the largest areas of model uncertainty from the equation, event frequency."
