An Award-Winning Approach to Risk Modeling for North America
Pete DaileyOctober 15, 2018
As an organization, it is always great to get recognition from the industry for the work that you are doing; and industry recognition does make a real difference to the teams that work so hard to produce robust, quality solutions that are solving the problems that the market faces. And so, on September 27, off we went to Cipriani 25 on Broadway in New York, for the Eleventh Reactions Annual North America Awards, with RMS receiving the “2018 North America Risk Modeler of the Year” award.
This award is decided by votes from the industry and it recognizes our reputation for providing best-in-class support and leadership to our North America clients, and especially at times when insight is so critical to a business — such as during the significant cat events that ran through 2017. It also provides an endorsement for the approach that RMS is taking more generally to anticipate and deliver on the needs of the North America market, to keep pushing the boundaries and break new ground, to help a growing client base across the industry ranging from reinsurers and carriers through to capital markets.
2017: North America Shoulders the Largest Losses
In a year that delivered the highest insured global losses on record, the natural disasters that really dominated in 2017 were especially concentrated in North America; around 83 percent, or US$273.9 billion of losses were from North America compared to overall global losses of US$330 billion.
And with three major hurricanes in 2017, it was the RMS climate risk models, such as the RMS North Atlantic Hurricane Model suite, that helped deliver insights for the market. This model suite gave our clients the ability to quantify, differentiate, and manage hurricane risk accurately, from the local level to larger portfolio management and capital management decisions. Version 18 of the suite has proved invaluable as it works to deliver a complete view of tropical cyclone risk from wind and storm surge, as well as inland flood risk from our soon-to-be-released U.S. Inland Flood HD Model.
Pre-landfall, our models are widely used by clients and provide the backbone to our own event response capabilities, as we continually refine forecasts based on the very latest information. The sheer breadth of real-time information sources that RMS now has available is unique in the market, and the way in which we measure and simulate a hurricane’s windfield has also developed dramatically thanks to RMS HWind.
HWind products reflect wind field characteristics with more accuracy, precision, and frequency than publicly available sources. Capturing the most comprehensive set of observational data available to the market, HWind incorporates wind data from over thirty unique land, air, and sea-based platforms including aircraft reconnaissance, dropsondes, airborne Doppler radar, buoys, satellites, and coastal observing networks. During events such as Hurricane Maria (2017), when the main radar tower for Puerto Rico was destroyed, HWind has the ability to carry on by leveraging data from alternative sources.
HWind datasets incorporate unique windfield analysis metrics implemented by HWind scientists, such as Integrated Kinetic Energy (IKE), which is a globally recognized index for measuring tropical cyclone destructive power (as a function of size and intensity), and a useful alternative to the Saffir-Simpson Scale. These real-time updates are available for RMS clients to provide what is becoming regarded as the industry standard “ground truth” for tropical cyclone wind assessment before, during, and following landfall.
Our event response teams work around the clock to provide tailored guidance to clients as they work out the impact that such an event may have on their exposure. And as a business, we care about the accuracy of our loss data — after a storm makes landfall, we conduct a deep analysis of the event and its impact, including a full event reconstruction validated by on-site reconnaissance collected from the field by our own scientists and engineers. Only after this is complete do we issue an insured loss estimate to the market, thus delivering losses and insights that are supported by evidence.
Looking to the Future
This award also shows recognition for how we are preparing clients for the future and what RMS brings to an evolving market with science-based insights and a comprehensive, data-driven approach to modeling risk. RMS continues to demonstrate a commitment to partnering with clients globally to help them better assess gaps and stresses in their portfolios. For instance, our work on California earthquake risk and the implementation of the UCERF3 research from the USGS into our models, challenges conventional thinking on risk diversification. Our model development also helps clients to capitalize on new opportunities, such as those associated with wildfire risk across North America and the growing and evolving private market for U.S. Inland Flood.
It is not just North America, but globally, that our clients recognize the value of RMS models during catastrophic events and the ongoing support we provide to their ever changing business needs. And working with the industry-at-large, we are pursuing innovative solutions toward a goal of global sustainability and resilience.
From everyone at RMS, we would like to thank the Reactions judges for this honor.
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Dailey is VP, Model Development at RMS and has served the CAT modeling industry for 20 years. He is responsible for delivering Global Event Response products to RMS clients before (forecast products), during (real-time response) and following (event reconstruction) all major natural catastrophes worldwide.
Pete manages teams in London, U.K. and Florida, dedicated to providing 24/7/365 support as events unfold. Pete is also actively involved in formulating RMS’ strategy for developing climate change risk analytics and solutions.Pete has presented and published on various topics important to risk management including tropical cyclones, severe convective storms, coastal and inland floods, and the relationship of our changing climate to the dynamic landscape of insured and economic risk.
Pete holds degrees in Econometrics and Systems Engineering from Penn and a M.S. and Ph.D. in Atmospheric Science from the University of California, Los Angeles.