RMS enhances Canada coverage in its North America wildfire product suite

RMS has unveiled the RMS Canada Wildfire HD Model as part of the RMS North America Wildfire HD Model Suite on RMS Risk Modeler.

The new Canada model offers a more granular view of wildfire risk in the country, giving customers insights about how individual locations in Canada will be impacted by wildfire events. It includes hundreds of millions of dollars of granular claims data, and explicitly simulates ember travel that goes beyond traditional fuel-based fire spread simulation techniques.

The model provides a coast-to-coast, probabilistic wildfire view for Canada’s ten provinces on a simulation-based framework, with millions of realisations across thousands of simulated years. It sheds light on the complex behaviors that characterise fire spread, ember accumulation, fire ignition, and smoke dispersion, RMS added.

Traditionally, the insurance market has relied on inadequate zoning and mapping products when assessing wildfire risk, but recent disasters have demonstrated the deficiencies with some outdated solutions in the market, RMS explained.

The 2016 Fort McMurray Wildfire was the costliest disaster in Canada’s history, with insured losses totaling CA$1.7 billion ($1.36 billion), according to Swiss Re. Five years after this disaster, and in anticipation of the next fast-spreading event, RMS said it was offering the new solution to ensure Canada’s re/insurers, regulators, and wildfire management agencies can actively manage and understand this risk.

Michael Young, vice president of model product development at RMS, said: “Events such as Fort McMurray can threaten insurers with insolvency and point to the need to drill down into the wildfire risk, especially in the wildland-urban interface (WUI). These black-swan, long-tail scenarios require analysis of potential risk accumulations, to provide reassurance to regulators, and must be managed through better risk selection and pricing.”