According to a bulletin from Newark, Calif.-based Risk Management Solutions, threats from hurricanes will remain high this season, which officially began yesterday.
The company, one of the world’s leading providers of products and services for the management of catastrophe risk, has launched the 2004 version of RiskOnline, described as a “web-based system that tracks potential insurance losses associated with individual storms that threaten the US.”
According to the latest hurricane-season forecast issued this month from Colorado State University, the 2004 tropical storm season will feature above average activity. The University is predicting 14 named storms and eight hurricanes, of which three will become major hurricanes.
“Following the trend of recent years, all the major forecasting groups predict 2004 will have an active season, with tropical cyclone development above the long-term average,” commented Dr. Robert Muir-Wood, chief risk officer at RMS. “Factors that contribute to an active hurricane season include higher than normal sea surface temperatures, low vertical wind shear and surface pressure along with a favorable African easterly jet, weaker easterly trade winds, and higher pressure in the upper atmosphere.
“Real storm tracking and comprehensive loss modeling services are essential tools for underwriters and claims managers who must stay on top of events as they evolve,” he added.
RMS’ RiskOnline service is “a probability-based storm tracking system that estimates industry and portfolio-specific losses for individual storms that threaten the US,” said the announcement. “As soon as the National Hurricane Center starts monitoring a particular storm (generally several days before landfall), RiskOnline uses the NHC updates to automatically filter and assign probabilities to selected tracks from RMS’ basin-wide stochastic database of 400,000 simulated tracks. The data is then used to define event landfall statistics along the US coastline and their associated loss estimates.”
Subscribers have 24-hour access “to the latest loss projections for the industry or their own insurance portfolios, including breakdowns by state, region, line of business, or business unit. All of this, from the receipt of the NHC update to the posting of estimated losses, is done automatically and securely via the Internet, saving users time and effort.”
The release of a new RMS US Hurricane Model back in 2003 allowed more advanced capabilities for modeling storm characteristics and developing loss estimates, which are reflected in RiskOnline. Features include the transition of hurricanes into extratropical cyclones, a basin-wide methodology simulating hurricanes throughout their lifetime, and a time-stepping directional windfield model.
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