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What Physical Risk metrics are measured and how are they defined?

Answer

Physical Damage at Risk (PDaR): The PDaR describes the asset level damage factors that were calculated from the modeling process. PDaR can be understood as the percentage of an asset’s area that is exposed and vulnerable to a hazard event. 

Physical Value at Risk (PVaR): The PVaR can be understood as the total value of an asset that is exposed and vulnerable to a hazard event. This is derived by multiplying the financial information of the asset, specifically the total asset value, with PDaR. 

Expected Loss: The expected annual loss from physical risk is the annualized PVaR of an asset. As the PVaR is only realized in the event of a hazard, the annualised physical risk is useful to provide a realistic expectation of physical risk for an asset to face at all times. 

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