RMS, the Newark, Calif.-based risk modeling and analytics firm, announced the release of new European Severe Convective Storm (EU SCS) High Definition Models.
The models represent 50,000 years of simulation of hail and straight-line wind and tornado risk and include all key lines of business — including automobile and property. In addition, the models cover 17* countries in Europe, complementing the RMS European climate hazard model suite.
Severe convective storms in Europe generally occur within the mid-latitudes in summer and can cause extensive loss to vehicles and property. Sometimes viewed as an attritional peril, severe convective storm risk is often managed using historical experience, despite incomplete observational reporting, said RMS in a statement.
Recent events have shown the potential cost of this peril for the re/insurance industry, said RMS, noting that from 2013 to 2019, losses from major and attritional severe convective storms in Europe exceeded €12 billion (US$13 billion).
The models cover the full spectrum of sources of severe convective storm (SCS) loss, from localized tornadoes and hailstorms to large derechos. The HD framework enables modeling time-based policy conditions such as hours clauses of varying length, fulfilling the diverse needs of European insurers for underwriting, portfolio management, and capital adequacy, RMS explained.
The models complement the existing suite of RMS climate peril models for Europe, providing users with a holistic view of climate risk across the domain.
As severe convective storms have significant impact on both property and automobile lines of business, RMS models the vulnerability of these two lines. This includes dynamic modeling of automobile movement, helping users understand sensitivity in vehicle vulnerability due to variation in location and time of day.
“RMS’ EU SCS HD Models give a pan-European view of convective storm risk, developed using latest scientific research, and complementing the existing RMS Europe Wind & Flood solutions, providing users with a holistic view of climate risk across the domain,” said Mohsen Rahnama, chief risk modeling officer, RMS.
“We use a hybrid modeling approach, combining parametric and statistical methods which best capture storm footprints, and their associated frequency and severity, hence enabling the assessment of cross-peril correlations,” Rahnama continued.
“The multi-peril stochastic set includes over 7.5 million events, covering 17 countries, based on 50,000 years of simulations, so that we appropriately capture the spatial and temporal scale of convective storm risk in the European modelling domain,” he said.
“This provides in-depth analytics not only on potential loss magnitudes for insurers’ portfolios, but it also captures the geographic and sub-peril correlations accurately. The model is calibrated using billions of Euro property and automobiles claims data,” Rahnama added.
RMS said its HD models have all undergone a upgrades as they transitioned to the Risk Modeler application, which gives them greater flexibility and computational strength.
The following models are offered in addition to the U.S. Flood and U.S. Wildfire HD Models that have been available through Risk Modeler’s earlier version:
- Updated Europe Inland Flood Model suite that covers 18 river basins and over 8,000 catchments across 15 countries in Europe
- Updated Japan Earthquake and Tsunami and New Zealand Earthquake models that both include sub-peril coverage for tsunami, fire-following, liquefaction and landslides
- Updated Japan Typhoon and Inland Flood Model that incorporates the most recent events such as Typhoons Jebi, Faxai and Hagibis.
Each of these models is available through RMS’ Analytical Services and will be coming onto Risk Modeler 2.0 for June-September 2020.
* RMS’ European Severe Convective Storm (EU SCS) High Definition Models are offered in 17 European countries: Austria, Belgium, Czech Republic, Denmark, France, Germany, Italy, Liechtenstein, Luxembourg, the Netherlands, Norway, Poland, Ireland, Slovakia, Sweden, Switzerland, and the United Kingdom. France includes Monaco; Italy includes San Marino and Vatican City.
Source: Risk Management Solutions, Inc.
Photograph: Waves batter the North Sea coast at the ferry dock in Dagebuell, northern Germany, Thursday, Dec. 5, 2013. Weather forecasters predicted winds gusting up to 87 miles (140 kilometers) per hour on Germany’s North Sea coast. Photo credit: AP Photo/dpa, Carsten Rehder.
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