Risk Management Solutions (RMS) announced today that the Florida Commission on Hurricane Loss Projection Methodology (FCHLPM) has approved the RMS U.S. Hurricane Model version 11.0 for use in residential rate filings with the Florida Office of Insurance Regulation.
The FCHLPM is a rigorous assessment of a hurricane catastrophe model, employing a team of experts to verify the technical credibility of the science, engineering, actuarial methodology, and software that the model is based upon.
Version 11.0 represents RMS’ latest view of hurricane risk and is driven by significant new hazard and loss data, as well as advances in research and technology since the models were last updated. It incorporates the results of a three-year research and development project into how hurricanes decay over land, conducted with the University of Miami, together with detailed analysis of tens of thousands of wind-speed observations – ten times more than were available in the last hazard update in 2003. As part of a detailed peer review process, the new methodology has been published in scientific literature and the model has been reviewed by independent external experts.
The updated model reveals new information about how hurricane risk is spread across Florida, with decreases in the view of risk to some coastal areas and increases in the view of risk to Central Florida compared to the previous model version. According to the new data and research, wind risk in some coastal locations, such as Miami-Dade, is lower than had previously been understood. At the same time, advances in our understanding of how hurricanes decay over land show that the risk in Central Florida, in areas such as Orange County, is actually higher than previously understood. While the relative risk has changed, coastal locations are still much more subject to hurricane risk than inland locations. Overall, the loss to the state as a whole increases by 6.5% under the new model.
As the market continues to adopt version 11.0, RMS is partnering with stakeholders at all levels to help manage implementation of the model and build understanding and intuition around the new view of risk.
Source : RMS
