Category Archives: RMS(one)

EXPOSURE Magazine: Looking Back, Looking Forward

The latest edition of EXPOSURE is essential reading for risk professionals, as we look back at what can be learned from last year’s events and look forward to the future including new challenges faced by the global risk management community and new opportunities to capitalize on.

EXPOSURE offers a unique perspective with a clear mission “… to provide insight and analysis to help insurance and risk professionals innovate, adapt and deliver.” And with a new North Atlantic hurricane season nearly upon us, and memories of HIM (Hurricane Harvey, Irma and Maria) fresh in the industry’s collective consciousness, EXPOSURE talks to the industry and paints a picture of a mature, responsible insurance sector that managed HIM with certainty and confidence. Cyber has also demonstrated its potential as a global systemic risk, and EXPOSURE looks at how events such as an outage of a major cloud services provider could generate economic losses as high as Superstorm Sandy.

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Join Us for Must-See Keynotes and Up Close Sessions at Exceedance 2018

With Exceedance 2018 coming May 14 – 17, we have lined up an interesting group of keynote speakers who will be onstage to provide their insights, ideas and inspiration. This year’s topics include:

Day 1: Earth, Wind and Fire

Our day one general session will focus on how we have leveraged lessons learned to bring new advances in model science and technology that enable (re)insurers to better manage and capitalize on catastrophe risk:

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Get Ready – Exceedance 2018 Is Coming to Miami

Welcome to the first in a series of informative blogs leading up to Exceedance 2018, May 14 – 17.

Preparations are well under way for this year’s event, which will be held at the InterContinental Miami — set on the Biscayne Bay waterfront in the heart of downtown’s thriving financial and business district.

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The Transformational Cloud

How does the cloud feature in the transformation plan for your business?

If you are a business leader in your organization, perhaps the “cloud” and your cloud strategy has been something left to the IT professionals who are responsible for managing your IT infrastructure.

But as a business leader, you are responsible for setting the transformation agenda in your organization. Across the board, many (re)insurers take advantage of the opportunities presented by digitalization. From online sales and advanced analytics to the Internet of Things — transformation is inevitable. Your ability to compete and secure future wins depends on how well your organization capitalizes on “big data” to balance speed to market, customer delight, and technology costs. Without the cloud, there is no big data.

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Exceedance 2018: Risk Management. Transformed.

Our sixth Exceedance conference makes a welcome return to Miami, this time at the waterfront InterContinental Hotel on May 14-17, 2018. The views over the Biscayne Bay, inspiring keynotes, over 75 informative sessions, demonstrations, engagement with experts in The Lab, and networking with 700+ industry professionals are all guaranteed. What else can we guarantee at Exceedance 2018? You will leave Miami with a new perspective on risk management, as we invite you to join us for our most transformative and immersive Exceedance yet.

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EXPOSURE Magazine: Essential Insight for Changing Times

I invite you to explore the latest digital edition of EXPOSURE Magazine, which also hit the streets of Monte Carlo as a print edition for those attending Les Rendez-Vous de Septembre, and will be available at RMS events over the coming months.

There is a clear mission for EXPOSURE, which is “… to provide insight and analysis to help insurance and risk professionals innovate, adapt and deliver.” And change is in the air for all businesses in the industry, whether it is developing new opportunities, getting products to market faster, being more agile and efficient, or using data-driven insight to transform decision making.

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Irma: From What Could Happen to What Did Happen…

17:00 UTC Tuesday, September 12

Emily Paterson, director – Model Product Management, RMS

Irma has now dissipated to the relief of many, not least those who experienced the storm’s wrath. The actuality of Irma was not nearly as bad as feared, as discussed in my colleague Tom Sabbatelli’s blog yesterday. Irma’s final path spared the major population centers of Miami and Tampa from the storm’s most damaging winds and storm surge.

Prior to and immediately after landfall, before we could see the final path and the actual impact of Irma, the best that anyone can do is look at the range of possible losses — as the final actual loss can only be known after an event is fully over and the details become clear.

To help our clients understand the potential magnitude of Irma’s insured loss during the storm’s approach, RMS provided guidance around what the distribution of potential wind losses looked like. But although we can have a good level of confidence in potential wind scenarios ahead of time, it is only part of the equation. As the hurricane approaches, we can provide guidance on the risk and identify areas that could be affected by storm surge and flooding, but the distribution of potential losses from these perils is uncertain as these losses are highly sensitive to the nuances of the storm’s final track and wind field structure.

Remember that the Saffir-Simpson scale no longer advises on the expected levels of storm surge following Hurricanes Katrina and Ike — storms that disproved the conventional understanding of the links between a hurricane’s intensity and its storm surge potential.

Now that Irma has gone, observations and imagery have started to come in that reveal the storm’s true impact. We are now able to shift our focus from “what could happen” to “what did happen”, from postulating potential wind loss distributions to delving into the hazard — including storm surge and flood — and damage observations to inform our final reconstructions of the event. Ultimately our understanding of the totality of losses from Irma will account for all loss drivers, including those which were too uncertain to estimate ahead of time. Storm surge, flood and other complicating factors, such as the evacuations, business interruption, and the prolonged and extensive power outages, among others, will all play a part in the final outcome.

While Irma has only dissipated very recently, what is already very clear is that Irma is a very complicated and complex event. How the interplay between wind, storm surge and flood plays out in terms of losses, and adding on top the impact of the complicating factors listed above, will ultimately dictate what the final losses will be.

Wind and surge observations from anemometers and gauges go a long way in helping us to better understand the hazard experienced on the ground, and are crucial as we look to reconstruct the hazard from Irma – our first step to understanding the full loss.

Satellite and drone imagery helps us go one step further and gives us a “birds eye view” of the damage experienced, helping to provide a fuller picture of both the type and level of damage, as well as a good indication of the extent. As we inspect the imagery we are looking for things that will help us refine our understanding of losses from this event — how far inland can we see surge damage? Is there roof damage from winds over a large area? We can use these observations to help refine and validate our understanding of loss. Another advantage of leveraging imagery is that it helps inform where we should focus our field reconnaissance efforts.

Figure 1. Map showing Key West Naval Base with photo image of residential area in the top right corner.  Source: OpenStreetMap

Figure 2: Residential area near Key West Naval Base, pre-event image from Google Earth, post-event aerial image acquired by NOAA on September 11, 2017

Our “boots on the ground” field reconnaissance approach really helps us refine our understanding with more detailed information. Not only does it help validate hazard observations with damage observations, but conversations with home and business owners, as well as those working on the recovery efforts, gives us insight into the prolonged effects impacting the affected communities, such as lengthy closures of businesses and insight into the types of internal and contents damage experienced by homeowners.  Our field reconnaissance plans are already underway and as those field observations come in, they will be fed into our process as well. The more information we have about the damage on the ground, the better our understanding of the full totality of losses from an event will be.

Hurricane Irma: The Exposure Variable

11:00 UTC  Thursday, September 7

Rhett Austell, director – Client Solutions, RMS

In the days leading up to landfall for a major hurricane such as Irma, you will find RMS employees and clients glued to their devices. We are all reading weather blogs, studying RMS HWind snapshots, monitoring Twitter, and sharing each other’s projections and observations on LinkedIn. This is all to get the latest view on a dynamic system – what is the maximum sustained wind? What is the Rmax? Central pressure? What is the integrated kinetic energy?

In such a dynamic situation, it is important to also consider what is static: the concentration of exposure within the hurricane uncertainty cone. In the most general sense, the industry insured loss for such an event is a function of the physical characteristics of the storm and the scale of exposure that is impacted. As has been stated elsewhere on the RMS blog, loss scenarios will vary significantly depending on the concentrations of exposure underlying the event footprint. For hurricanes, a few miles can be the difference between a footnote on a quarterly earnings statement or front page headlines. This was the story last year with Hurricane Matthew after it “wobbled” to the east and spared much of southeast Florida.

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Harvey Shows the Advantage of Cloud Solutions When “Time to Insight” is Crucial

Farhana Alarakhiya, vice president – Products, RMS

Hurricane Harvey continues to be top of mind at the RMS offices. On Wednesday, RMS hosted a client webinar where Mark Powell, Tom Sabbatelli and Pete Dailey discussed how we have applied our methodology developed for the RMS U.S. High Definition (HD) Flood Model to provide insights to the extent and severity of the flooding from Harvey, with Houston as our top priority. This effort has resulted in a high-fidelity hazard inundation map which is now available to all RMS clients.

For clients on the RMS(one)® platform who use Exposure Manager, this effort goes one step further. We automatically seed the Harvey hazard layer in the client tenant, to deliver instantaneous access to analytic insights from the U.S. Inland Flood HD Model.  This models all sources of flooding across space and time, and can also be used to identify and differentiate locations at risk based on flood extent and severity.

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Data Analytics: Fueling the Future of Insurance

Look around and you see the financial services industry being transformed by a newfound ability to tap into a vast amount of data, right at their fingertips. Where business decisions were reliant on intuition and experience, and transactions underpinned by the strength of relationships, data analytics now drives everything from credit rating to complaint handling, from social media-driven marketing to employee performance monitoring.

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