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


Physical Damage at Risk (PDaR): The PDaR describes the asset-level damage factors that were calculated from the modelling 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. It is derived by multiplying the asset’s financial information, 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. 

Related topics

1.2.2 Physical risk metrics

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