Monthly Archives: April 2014

What Disaster Models Tell Us About U.S. Tornado Risk

This week’s deadly tornadoes in the South cut a swath of devastation through several states. The disaster also brought a shattering end to what had been a relatively quiet start to the usual peak U.S. tornado period. We asked Matthew Nielsen, director of RMS model product management, about the company’s tornado models and what they say about the rest of this year’s tornado season.

Q: What did RMS modeling reveal going into the 2014 tornado season?

Nielsen: RMS modeling revealed the elevated risk found in areas of the Southeast, specifically the heightened tornado risk from long-track storms. We tend to find that while the frequency of tornadoes in states like Alabama, Arkansas, and Mississippi is not as high as states in the Tornado Alley, the tornadoes that do occur in these states tend to persist much longer on the ground and affect more exposure.

Q: What is the general financial and economic impact of tornadoes as compared to other catastrophes?

Nielsen: Tornadoes tend to have very high damage ratios, meaning that most locations in its path will suffer extreme to total damage. If a tornado hits an exposure center with high-value commercial or industry risks, losses can easily pass the $1 billion mark. While tornadoes tend to have much smaller and more focused paths than hurricanes, they can inflict heavy losses to the exposure they affect, and have historically been known to cause losses in excess of $2 billion to $3 billion for a single tornado track.

Q: What has made the current tornado outbreak span multiple days and multiple regions?

Nielsen: The current outbreak has persisted for several days over a very similar region due to the very slow moving nature of the low-pressure system. This is also related to the persistence and stubbornness of the atmosphere this season. Given the overlapping areas of intense thunderstorms over the last few days, flash flooding is becoming more of an issue due to repeated periods of intense rainfall.

Q: Based on the information available, what’s in store for the rest of the season after having a slow start but recently picking up steam?

Nielsen: On one hand, the storm door may now be open, and we could see a very active May. We are now reaching the climatological peak of the severe convective storm season; May is typically the highest activity month in the U.S. The overall weather pattern over North America has been very stubborn and persistent this year, as we saw with the frequency and duration of cold weather over the eastern half of the continent, and warm, dry weather over the west coast. It is possible that activity may continue at this heightened pace for several weeks.

Conversely, given how quickly it went from active to inactive over the last week, it could also transition back to a relatively quiet phase for the next few months. There is a lot of uncertainty as to how the rest of the season may play out.

As the season progresses, we should start seeing more activity over the traditional Tornado Alley states, with less activity over the Southeast U.S. Activity this time of year is usually more focused around the southern Plains states like Oklahoma, Kansas, and Texas. Arkansas, Alabama, and Mississippi usually experience their activity peaks in the late winter to early spring months of February and March.

Matthew Nielsen. Director, Model Product Management, RMS

Matthew Nielsen. Director, Model Product Management, RMS

Matthew is a meteorologist and geographer with extensive experience in catastrophe risk in North America. At RMS, he is responsible for the development of the RMS climate-peril models for the Americas, including the severe-convective storm, winter storm, flood, wildfire and hurricane models. He has conducted field reconnaissance for major catastrophes including Hurricane Katrina in 2005, the Greensburg tornado in 2007, the Tuscaloosa-Birmingham tornado in 2011 and Hurricane Sandy in 2012.  Matthew has been instrumental in regulatory outreach for RMS in the U.S. He liaises regularly with regulators in 15 states to establish open channels of communication about the use of RMS models and solutions. Prior to RMS, Matthew was a graduate research assistant at the Cooperative Institute for Research in the Atmosphere (CIRA) where he authored a thesis on remote sensing in satellite meteorology.  

Matthew holds a master’s degree in atmospheric science from Colorado State University and a bachelor’s degree in physics from Ripon College, where he won the Henry Knop Award in Physics. 

He is a member of the American Meteorological Society (AMS), the International Society of Catastrophe Managers (ISCM), and the American Association of Geographers (AAG).

From ESPN-tickers to Mapping Apps at the RMS(one) Hackathon

The RMS Exceedance event was a particularly exciting time for our team this year because for the first time ever, we held sessions and events specifically for developers.

I got to know many of the developers who are now using the RMS(one) API to build apps for the RMS(one) platform over the course of the week—during hands-on sessions with the RMS(one) API, through the Hackathon, which challenged participants to create apps in less than 24 hours, and at the Exceedance Party last night, where we celebrated a great week.

Also, 60 of RMS’ client developers, who build proprietary models, got hands-on with the RMS(one) Model Development Kit (MDK), which enables the creation of peril models that are designed to be deployed and run on the RMS(one) platform. And over 70 client developers got hands-on with the RMS(one) API, showing the strong appetite for this API.

RMS' client developers attending the hands-on sessions with the RMS(one) API at Exceedance 2014

RMS’ client developers attending the hands-on sessions with the RMS(one) API at Exceedance 2014

One of the highlights of my week was the Hackathon, because it showed how many great developers are part of our growing community. I was blown away by what our Hackathon participants were able to do in such a short period of time with the API.

The RMS(one) Hackathon participants in Washington D.C.

The RMS(one) Hackathon participants in Washington D.C.

I had the pleasure of announcing the finalists in The Lab yesterday afternoon and would like to share them with you.

RMS(one) hackathon judges at Exceedance 2014

RMS(one) hackathon judges at Exceedance 2014

TickerJoy, created by Scott Christian of AXIS, provides high-level summaries of exposure, losses, and other pertinent data in an ESPN-style ticker that can be customized to each user’s preference. TickerJoy is aimed at executives in particular, to provide context behind the data in an easily-digestible way. The app was built in VB and used Excel as the user interface.

CatBurglar, created by Alain Bryden and Oliver Baltzer of Analyze Re, is a tongue-in-cheek app allowing hypothetical burglars to identify prime targets near them by arranging properties with high insured values on Google Maps. It even pulls data such as whether or not a house has a security system. Once a target is identified, the burglar can get directions to the property directly in Google Maps. Not only was this a fun, creative app; it also showed an interesting use of the API. (Don’t worry, real data wasn’t used, nor would real data be accessible to anyone outside of the organization that owns the data!)

And finally, our winner:

ClusterGuy, created by Felipe Dimer De Oliveira of Risk Frontiers, built an app that compares two portfolios, merges risk exposures, and finds clusters using Mathematica. The results are exported to Google Earth, where clusters are indicated by colors, and portfolios are indicated by symbols. This highly visual way to compare portfolios earned the top prize from our Hackathon judges.

Here’s a short video showing ClusterGuy in action:

Exceedance 2014 RMS(one) API Hackathon Winner from Risk Frontiers on Vimeo.

Thank you to everyone who joined us this week at Exceedance. I am looking forward to continuing to work with our developers in the coming months to see more great ideas like these come to life.

Highlights from the Ground at Exceedance 2014

This week we have been in the Washington D.C. area for our largest Exceedance yet. It’s been a great few days, action packed with presentations, meetings in The Lab, and evening networking receptions. We hope that our guests are enjoying all the informative sessions and have gotten a chance to unwind at the evening receptions.

At RMS, we’re celebrating our 25th anniversary this year, and will be celebrating in style at the EP, our annual Exceedance Party, held at the International Trade Center this evening.

A few highlights from the ground:

Keynote Sessions

We are very proud to have 20 customer speakers participating in the conversations at Exceedance throughout keynotes, breakout sessions, and Mini Theatre presentations. This is an important part of what Exceedance is to RMS—a time for the industry to meet and discuss pressing topics and learn from each other.

We had a brilliant line-up of keynotes this year, including:

  • Our very own Hemant Shah, RMS co-founder and CEO, who kicked off Exceedance by sharing some of RMS’ history to commemorate the 25-year anniversary
  • Trevor Maynard, head of exposure management and reinsurance at Lloyd’s of London, who discussed model uncertainties
  • Dr. Solomon Hsiang, climate risk expert, who discussed extreme climates and their systematic connection to social conflict and violence
  • Dr. Robert Muir-Wood, RMS chief research officer, who presented on the five dimensions of earthquakes
  • Dr. Claire Souch, senior vice president of business solutions at RMS, who shared the model development agenda and discussed HD modeling

Model Partners

In addition to the keynote presentations, we made a few very exciting announcements this week at Exceedance. In particular, we announced five new model partners that are making their models available on RMS(one)!

Mario Ordaz, president of ERM, joined our chief products officer, Paul VanderMarck, on stage to discuss his company’s experiences implementing their models on RMS(one). You can read more in Paul’s blog post welcoming model partners.

Developer Partners

Another exciting element of Exceedance is The Lab, with 12 demo stations that allowed attendees to get hands-on experience with RMS(one), meet the experts, and watch various Mini Theatre sessions throughout the breaks. Attendees could also get demos from a couple of our developer partners, including Spatial Key and DiDi, whose apps leverage the RMS(one) API.

The Lab at Exceedance 2014

For the first time this year, we had a developer track during Exceedance. The hands-on sessions were standing-room-only with developers trying out the RMS(one) API and MDK. We also held the first-ever RMS(one) Hackathon, which challenged developers to create apps using the RMS(one) API in under 24 hours. The finalists presented their apps to a crowded room this afternoon. Read this blog post that provides details on the apps and the winner!

Thank you to all attendees who joined us this week. We look forward to seeing you at next year’s Exceedance, which will take place April 27-30, 2015 at the Fontainebleau Miami Beach Hotel in Miami, Florida.

RMS Welcomes Our Newest Model Partners at Exceedance

It has been great to see so many industry people in Washington, D.C. for Exceedance this week, talking about catastrophe risk management, RMS(one), and the ecosystem that is developing around it.

This morning we heard from Hemant Shah and other keynote speakers discussing technological advances within the industry and beyond, and then I had the opportunity to share with our audience the latest developments in the RMS(one) ecosystem.

Today we welcomed five new modeling partners – Catalytics, CatRisk® Solutions, COMBUS, OYO Group, and QuakeRisk – who are implementing probabilistic catastrophe models on RMS(one) that will be made commercially available to RMS(one) users.

One metric I was excited to announce is that with the addition of these new partners, the total number of fully probabilistic models that will be available on the RMS(one) platform is now nearly 300. On top of the RMS model suite, the more than 100 models being implemented by other modelers – including previously announced partners ARA, ERN, JBA, and Risk Frontiers – will significantly extend the coverage of models available on RMS(one) to new geographies and perils while also bringing additional views of risk to areas already modeled.

Equally exciting, we can now declare victory on the successful implementation of our first partner models, with models from ERN and Risk Frontiers now running on RMS(one).

Mario Ordaz, president of ERN, on stage at Exceedance 2014

Mario Ordaz, president of ERN, on stage at Exceedance 2014

Mario Ordaz, president of ERN, joined me on stage this morning to talk about ERN’s experience implementing their Mexico earthquake model on RMS(one). A decade ago we explored together the possibility of them implementing that model on RiskLink, but concluded that it would have been impossible without ERN compromising on their unique modeling approaches in order to fit their model into an RMS modeling framework. It was gratifying to hear Mario describe on stage today how ERN has implemented its complete Mexico earthquake model intact on RMS(one), maintaining its integrity and validating that our architecture enables modelers such as ERN to leverage RMS(one) as a platform without having to accept any technical constraints on their models.

For the first time in the history of this industry, insurers, brokers, and reinsurers can operate models from multiple providers on a single platform. This brings enormous operational efficiencies, and even more importantly, it enables our clients to access models from a much wider range of providers than has ever been feasible before and to develop a more complete and robust understanding of risk.

For our partners, this presents an opportunity to grow their specialist modeling businesses. Many of our partners do very little business outside of their local insurance markets, and RMS(one) now makes it possible to effectively deliver their models to the global insurance and reinsurance markets.

Indeed, the ultimate health and success of the RMS(one) ecosystem will not be measured by the number of models implemented on RMS(one) but rather by the number of successful modeling businesses built on it. Judging by the numerous clients engaged in discussions with the modeling partners who are here with us at Exceedance this week, we are off to an encouraging start.

Kicking off Exceedance 2014

Greetings from Exceedance 2014. In addition to all the exciting keynotes, sessions and activities we have planned for the week, we are celebrating RMS’ 25th anniversary.

If you are joining us in Washington, D.C. at the Gaylord National waterfront resort, we have a jam-packed schedule that kicks off tonight with a reception in The Lab at 5:30 pm. For those of you who couldn’t make it this year, the RMS team on the ground will keep you up-to-date via social media.

Follow RMS on Twitter, LinkedIn and Facebook for Exceedance news, insights, and photos. Make sure to tag any Exceedance-related social media posts with the hashtag #Exceedance to join the conversation, and keep an eye out for blog posts that will be published by my colleagues throughout the week.

We are excited to bring the industry together at Exceedance, the largest catastrophe risk management event, which includes visionary keynote speakers, 11 tracks, 70 sessions and more than 100 subject experts.

With so much going on, we’ve built an Exceedance mobile app to help you manage your schedule and maximize your week. Download Guidebook for iPhone and Android, and search “Exceedance 2014” to download the app.

Here are few highlights I recommend you don’t miss:

Keynote Speakers: Insights from our keynote speakers will no doubt be thought-provoking and set the tone each day:

  • Vivek Kundra, the first chief information officer for the U.S.
  • Trevor Maynard, head of exposure management and reinsurance at Lloyd’s of London
  • Dr. Solomon Hsaing, climate risk expert
  • Hemant Shah, RMS co-founder and CEO
  • Dr. Robert Muir-Wood, RMS chief research officer

The Lab: This year the Lab takes demos to the next level, giving you the opportunity to interact directly with RMS(one). There will also be a Mini Theatre for brief talks on engaging topics, and Meet the Experts booths for all your RMS model and RMS(one) adoption questions. We’ll have a special event at the Lab’s Mini Theatre on Tuesday, April 15, at 11:45 am, where biomedical gerontologist Dr. Aubrey de Grey will join us to discuss his anti-aging research.

Model Insights: Get deep insights into RMS models with more 30 hours of content, 20 sessions in the Mini Theater, and access to RMS model experts. Learn about the RMS roadmap, the wealth of new models being released in 2015, and new generation HD models.

RMS Hackathon: The first ever RMS Hackathon will debut at Exceedance this year, welcoming the developer community and challenging them to create innovative RMS(one) apps using the RMS(one) API. Onsite developer support will include hands-on workshops, a kickoff session to provide details and guidelines, and dedicated development areas with experts available to provide technical assistance. Prizes will be awarded to the three best entries at the Hackathon award ceremony on take place on April 16 at 3:50 pm.

“EP” – The Exceedance Party: This year we’ll be at the International Trade Center on Wednesday evening, where you can enjoy dinner, drinks and entertainment while catching up with industry colleagues. Don’t forget to bring your government issued ID!

If you have any questions throughout the week, our team staffing at the registration desk can help you out, or feel free to reach out to us on Twitter @RMS.

Working Toward a More Resilient Society in Partnership with Risky Business

 

Ever since my colleagues and I started RMS 25 years ago at Stanford University, we’ve been motivated to make the world a safer and more resilient place. This mission-driven approach has been our passion and a part of RMS culture since the beginning.

Over the years we have made numerous contributions in myriad ways. Today we announced an exciting partnership with the Risky Business initiative to work toward our shared goal of enabling the world to better understand and manage the risks associated with climate change.

Risky Business, a joint initiative of Bloomberg Philanthropies, the Office of Hank Paulson, and Next Generation, launched in October 2013 to quantify and publicize the economic risks that the United States faces as a result of climate change.

The initiative has two core components:

  • Assessing the economic risk of climate change in the United States
  • Engaging communities most at risk, to help community leaders prepare a measured response to the risks that they face

RMS is a Risky Business content partner, and our modelers and analysts are incorporating peer-reviewed climate change science into the RMS U.S. hurricane and coastal flooding models to quantify the economic risks associated with the uncertainties in climate change.

Our team, led by Dr. Paul Wilson, created an ensemble of stochastic event sets that reflect a range of possible sea level and oceanic conditions for each of the coming decades. The results of our work with Risky Business will be included in a report on the economic impacts of climate change in the United States later this year.

While there are uncertainties regarding the impact of climate change, the risks are real and can be quantified using the big compute technologies now at our fingertips and by systematically applying a scientific approach in addressing climate change issues. By objectively measuring this risk, we can—as a society—start to manage it.

I’m proud of the work my colleagues are doing every day to create models and software that enable key business sectors around the world to quantify and manage risk with the ultimate goal of increasing resiliency.

It is through work such as this that we live the mission of our company every day, as we strive to create a more resilient world. I look forward to updating you on our progress in coming months and sharing the results of our work with Risky Business.

In the meantime, if you want to find out more about the initiative and RMS’ involvement, check out this TIME magazine article.