Builders Risk

Modeling Earthquake, Hurricane, and Storm Surge for the Builders Risk Portfolio

Projects under construction differ from finished property from both an insurance-coverage and catastrophe-modeling perspective. The RMS® Builders Risk Model incorporates a unique and inventive approach to quantifying risk to property insurance by capturing the distinct differences in structural phases and estimating their probabilistic losses.

The Builders Risk Model is a fully probabilistic catastrophe model applicable to earthquake, hurricane, and storm surge perils in the U.S., and earthquake risk in China. It works in conjunction with the RMS® U.S. Earthquake, U.S. Hurricane, and China Earthquake models, incorporating unique vulnerability and value ramp-up characteristics of construction projects, allowing insurance underwriters to quantify risk by project type, construction class, and phase of construction.

Model Highlights

	Considers construction site vulnerability and value ramp-up curves generated by construction cost data and an RMS inventory of construction project schedules
	Provides a variety of loss estimate views including 4 distinct critical phases of construction (5 for China) as well as the average and worst case loss over the life of a project
	Contains 72 occupancy/phase combinations (U.S. models), 83 occupancy/phase combinations (China model), and 7 construction classes for analysis
	Incorporates damage functions for property, contents, and business interruption
	Includes data management tool to allow project updates based on current phase of construction view and performs “what if” scenarios on a construction portfolio to ascertain sensitivities around key dates (e.g., July 1 renewals)

Geographic Scope

All of the United States and China.

Exposure Data Resolution

As part of the RMS U.S. Hurricane and U.S. Earthquake models, the Builders Risk Model supports analyzing exposures at each of the following levels of geographic resolution: latitude/longitude, street address, ZIP Code, city, and county.

As part of the RMS China Earthquake Model, the Builders Risk Model supports analyzing exposures at each of the following levels of geographic resolution: latitude/longitude, 6-digit postal code, city, and county (district).
 

Related Models

	China Earthquake Model
	U.S. Earthquake Model
	U.S. Hurricane Model