What a difference a week makes. A week before the tragic events in Manchester, RMS was in New York, and the previous week in London as we hosted over 400 risk professionals from across the (re)insurance industry at two half day terrorism seminars. The seminars featured several of the world’s leading experts on counterterrorism, modeling, and terrorism risk management and highlighted the fluid threat environment, its insurance implications, and the impact of technology on terrorism risk. Continue reading
The 2016-17 Australian region cyclone season will be remembered primarily as an exceptionally slow starter that eventually went on to produce a slightly below-average season in terms of activity.
With the official season running from November 1 to April 30 each year, an average of ten cyclones typically develop over Australian waters with around six making landfall, and on average, the first cyclone landfall is by December 25. For the 2016-17 season, we saw nine tropical cyclones, of which three further intensified into severe tropical cyclones and three of which made landfall, running contrary to an average to above-average forecast from the Bureau of Meteorology. Continue reading
Together with the California Earthquake Authority (CEA), RMS co-hosted a webinar on May 17 for the CEA’s global panel of catastrophe reinsurers to explore how new earthquake science and RMS modeling impacts the CEA and its markets. The CEA is one of the largest earthquake insurance programs in the world with nearly one million policyholders throughout California. In the webinar, we analyzed and shared insights about the risk to the CEA book using the new Version 17 RMS North America Earthquake Models which was just released on April 28.
RMS is delighted in playing an integral role at the United Nations’ Global Platform for Disaster Risk Reduction in Cancun next week. This is the first time that government stakeholders from all 193 member countries have come together on this subject since the Sendai Framework for Disaster Risk Reduction was adopted in March 2015. Cancun looks forward to welcoming some 5,000 participants.
The event is arguably the most significant cyber-catastrophe to date and clearly demonstrates the systemic nature of cyber risk. A single vulnerability was utilized to spread malware to over 300,000 machines in over 150 countries causing havoc to industries as diverse as hospitals and car manufacturers.
The term “observer effect” in physics refers to how the act of making an observation changes the state of the system. To measure the pressure in a tire you have to let out some air. Measure the spin of an electron and it will change its state.
There is something similar about the “insurer effect” in catastrophe loss. If insurance is in place, the loss will be higher than if there is no insurer. We see this effect in many areas of insurance, but now the “insurer effect” factor is becoming an increasing contributor to disaster losses. In the U.S., trends in claiming behavior are having a bigger impact on catastrophe insurance losses than climate change.
It’s not as if a great evening at the Ritz-Carlton Coconut Grove in Miami with my peers and colleagues wasn’t special enough, but to collect the prize at the Reactions Latin America awards dinner for “Latin America Risk Modeler of the Year” was very special. I would like to personally thank the panel of judges who represent some of the leading figures in the region’s insurance and reinsurance market for the award.
Some fifteen years after terrorism risk modeling began after 9/11, it is still suggested that the vagaries of human behavior render terrorism risk modeling an impossible challenge, but still the core principles underlying terrorism risk modeling are not widely appreciated. Terrorism risk modeling, as it has developed and evolved from an RMS perspective is unique in being based on solid principles, which are as crucial as the laws of physics are to natural hazard modeling. The recent high-profile terrorist attacks in London, Stockholm, and Paris adhere to many of these principles.