Case study Estimating terrorism loss in Australian cities

How Geoscience Australia used computational modelling to estimate the financial losses associated with terrorist blasts and chemical or biological plume releases.

Published:30 September 2021

Aerial image of the city of Sydney

The problem

How to accurately estimate losses caused by terrorism

Following the September 11 terrorist attacks in the United States, there was a global withdrawal of terrorism reinsurance cover, resulting in an insurance market failure. Governments around the world swiftly established reinsurance pools to fill the void.

The Australian Reinsurance Pool Corporation (ARPC) was founded under the Terrorism Insurance Act 2003 and manages a pool of $13.4 billion, providing insurance cover for eligible terrorism-related losses across Australia. The Australian Government provides the largest single component of this cover, so it’s important to understand the potential losses that may be incurred due to terrorist acts in our cities.

The solution

Developing a terrorism loss estimation capability for Australian cities

Geoscience Australia created a modelling capability to estimate the potential hazard, exposure, vulnerability and impact of terrorist blasts in Australian central business districts (CBDs). If required, it can provide the ARPC with blast loss estimates for the Sydney, Melbourne (including Southbank), Adelaide, Brisbane, Perth, Hobart and Northern Sydney business districts in a single business day. It allows the ARPC to understand its financial exposure to a range of terrorism scenarios.

When a blast or plume hazard in a particular location is simulated, all buildings are assessed for damage and any necessary repairs costed. Insured loss estimates are developed for three types of insurance cover – buildings, contents and business interruption.

In a terrorist incident, losses across entire CBDs can be quickly assessed and ‘hot spots’ of damage identified. Modelling outcomes can be progressively refined as more information on the ground becomes available. The data can help inform the ARPC and Australian Government on likely impacts across the city and the subsequent cost of any damage.

Geoscience Australia’s capability provides an evidence-base for decision makers to better manage Australia’s reinsurance pool against terrorist loss. It also enables us to provide the Australian Government with immediate feedback in the event of an actual terrorist blast.

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Geoscience Australia works with state and local governments and the emergency management industry sector across Australia to develop local hazard assessments. For more information, contact

How we got there

Using data and scientific modelling to estimate potential blast damage

Collaborating with the ARPC, the Australian Federal Police and the Defence Science and Technology Group, we:

  • combined key datasets, including the National Exposure Information System (NEXIS), the ARPC insurance portfolio data, 3D building geometry and CBD survey databases – all spatially referenced according to the Geocoded National Address File (G-NAF)
  • conducted street-level surveys in 8 Australian business districts to understand exposure levels of over 7,000 CBD buildings. The surveys were undertaken by structural engineers and Geographic Information System (GIS) specialists, capturing information about the location, structural system, façades and other architectural features 
  • modelled the complex behaviour of blast waves from a detonation location using 3D building geometry
  • developed a library of pressure–impulse curves for a variety of typical building components to determine the vulnerability of façades and other structural components
  • created a series of blast damage financial models, which calculated the cost of damage to buildings by looking at building size, usage, location and quality, and analysing the level of damage sustained by components including facades, structural systems, and internal features such as mechanical systems, walls and ceilings.
Aerial image of a city at night with high density lighting, lighting up the image.

Looking forward

A successful decade-long partnership

  • Geoscience Australia and the ARPC have entered into a series of maintenance and development arrangements to keep blast and plume models current, ensuring they fulfil the ARPC’s needs into the future and continue to provide valuable advice to the Australian Government.
  • The ongoing program will see the Surfer’s Paradise precinct of the Gold Coast added to the blast capability.
  • The program partnership includes regular database updates to ensure the exposure information used in the modelling is current. CBD surveys and building geometry assessments are regularly updated, and new insured sums are added as they become available.
  • Geoscience Australia is aiming to use the program’s modelling capabilities to assess blast risk in Sydney and Melbourne.
  • Geoscience Australia is also exploring options to adapt the capability as an emergency management or counter-terrorism planning tool. Enhanced features could include human activity, casualty models, and predictions of urban search and rescue metrics such as quantity predictions for people trapped in a partial or complete building collapse.
  • Geoscience Australia would like to undertake future collaborative work with the relevant experts to expand the suite of vulnerability models. This could potentially lead to probabilistic analyses where uncertainty in modelling components is sampled to give a range of likely losses. 

How we can help you

Our blast and plume modelling resources produce evidence-based data for the Australian Government as it manages Australia’s reinsurance pool against terrorist loss.

Contact us to gain a better understanding of how the terrorism loss modelling capability could be applied in your state, region or sector.