Florida authorities approve latest RMS hurricane models for residential rate filings
RMS, the catastrophe risk modeling company, has seen version 21.0 of its North Atlantic Hurricane Models approved by the Florida Commission on Hurricane Loss Projection Methodology (FCHLPM).
It means version 21.0 hurricane models can be used for residential rate filings with the Florida Office of Insurance Regulation. The models are available on RiskLink 21.0 and the Risk Modeler application on the RMS open cloud platform, RMS Risk Intelligence.
Version 18.1 of the models also received FCHLPM certification in 2019, when RMS became the first catastrophe risk modeling and solutions firm to have its hurricane models certified for use simultaneously on both on-premises and cloud software.
RMS announced updates to Version 21.0 of its hurricane models on May 5, 2021, incorporating new data and learnings from recent impactful seasons, including more than $6 billion in new claims data.
Version 21 introduces a new alternative view of vulnerability for residential lines in Florida to give clients a clearer picture of their exposures, and long-term event rates updates to incorporate two new seasons of hurricane activity (2017-2018) from the National Hurricane Center’s Hurricane Database (HURDAT2) data. It also adds new medium-term rate forecast for 2021-2025 informed by data-driven updates and new historical event reconstructions from recent seasons and vulnerability updates in the Caribbean based on the 2017-2018 seasons.
Matthew Nielsen, senior director for regulatory affairs at RMS, said: “Obtaining FCHLPM certification is a key milestone in the development and go-to-market process of our hurricane models. It underscores the continued quality and reliability of our North Atlantic Hurricane Models, based on industry-leading science, data, methods, engineering, and software. The certification also has implications for other regions, as many other states affected by hurricanes look to Florida’s model certification process as a first step for their own state approvals.”
Jeff Waters, senior product manager for RMS North Atlantic Hurricane Models suite, said: “The updates in Version 21.0 include the latest insights into current and evolving market conditions in risk-prone areas. For instance, recent changes to the statewide building code in Florida have extended the geographical applicability of roof replacement requirements throughout the state. Initial assessments suggest this may drive material increases on overall claim severity, because it means a roof that might experience as little as 25 percent damage is required to be replaced in full.”
Mohsen Rahnama, chief risk modeling officer and executive vice president for models and data at RMS said: “As the 2021 hurricane season is now underway, it’s important to remember that hurricane is one of the biggest drivers of annual insured losses throughout the North Atlantic Basin.”
The FCHLPM certification of Version 21.0 of the RMS North Atlantic Hurricane Models will be valid until November 1, 2023. Version 21.0 will be generally available on June 23, 2021, on both RiskLink and Risk Modeler simultaneously.
