Calculating The Effects Of A Natural Disaster

The Allianz Risk Barometer 2022 reported that natural catastrophes are now the third-highest global business risk, while climate change has moved into the sixth position. These rankings represent 25% and 17% increases from last year.¹ Furthermore, the increasing complexity of business structures means that it is often difficult to predict the risks to which they may be exposed and how to calculate any ensuing loss.

In this article, we will discuss the concept of business interruption calculations as they relate to catastrophic events.

The Financial Impact of Catastrophic Events

Since a business' operations can be impacted by factors other than its individual physical damage, the approach to estimating losses from natural catastrophes can differ from normal property damage claims.