Newark Calif.-based Risk Management Solutions has taken another step in preparation for what experts are predicting will be an active hurricane season by integrating the third generation of its U.S. Hurricane model, introduced last February, into its RiskOnline(TM), a web-based system that tracks potential insurance losses associated with individual storms that threaten the U.S.
RMS said the new version of the risk model offers “more advanced capabilities for modeling storm characteristics and developing loss estimates,” reinforcing “the need for sophisticated storm tracking and modeling capabilities and offering, a “real-time storm tracking service for insurers, reinsurers, and brokers.”
Dr. Robert Muir-Wood, RMS’ managing director of global risk modeling, observed that “the past few years have been unusually quiet in terms of hurricane activity, owing partly to moderate El Nino conditions. The forecasts of higher activity this year serve as a reminder to the insurance industry not to become complacent about managing hurricane risk. Our services give underwriters and claims managers the tools they need to stay on top of these major events as they evolve.”
RMS said: “The newly released RMS U.S. Hurricane model is the first to fully represent the physical processes of hurricanes that impact the U.S. The model is the first of its kind to include the transition of hurricanes into extratropical cyclones, which are storms that particularly affect the Atlantic coast north of Cape Hatteras and exhibit different characteristics from pure hurricanes, with distinct implications for loss estimates.
“The model features a basin-wide methodology that simulates hurricanes throughout their lifetime, capturing the risk from multiple landfalls, and a time-stepping directional windfield model, providing for better insight into hurricane windspeeds at each site.”
In describing the models capabilities, RMS indicated it “operates at a resolution that is 10 times more detailed than ZIP Codes, using the highest modeling resolution in areas of high exposure and high hazard gradient such as coastal areas and major cities.” It includes “more than $7 billion of insured loss data.”
Using forecasts provided by the National Hurricane Center (NHC), RiskOnline will “automatically filter and assign probabilities to simulated tracks in the RMS basin-wide stochastic database of 400,000 storms. This process generates a fully probabilistic estimate of potential losses based on each NHC update. Users have 24-hour access to these loss projections for the U.S. insurance industry or their own company-specific portfolios, including breakdowns by state, region, line of business, or business unit,” the announcement concluded.
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