Abstract
Offshore installations are exposed to several natural hazards. The greatest is severe weather caused by hurricanes and cyclones. Such storms can be devastating, causing widespread damage and financial loss. Insurance companies offer a range of products that insure against potential losses, including physical damage, control of well, sue and labour, removal of wreck, business interruption and liability. This paper describes the development of the first stochastic natural catastrophe model for the northwest Australian coastal region. It is based on Monte Carlo simulations and uses scientific and engineering knowledge alongside actual insurance claims data to evaluate aggregate storm exposures for the offshore industry in this region. The model enables quantitative assessment of cyclone risk by developing an improved database through the compilation of available meteorological data. Its development is designed to allow the sustainable and reasonably priced supply of insurance, which is essential to the further extension of exploration and production activities and investment in Australia.
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