Tag Archives: economic loss

Protection Gap Analytics: The Role of Risk Modeling

This is the final blog in a series of four blogs examining three potential “protection gaps” and the importance of “protection gap analytics”. To read the first blog post in this series, click here.

We are not going to be able to take effective action to reduce any of these three protection gaps unless we can first learn how to consistently measure the difference between insured and total loss. Such measurement means we can know the current situation as well as set appropriate targets and monitor progress in reducing the gap. It can also help to focus investment and action.

At present, the only form of measurement is to acknowledge the difference between insured loss and the estimated total economic loss once the claims have settled, one or two years after a significant disaster.

In the same way that probabilistic catastrophe risk models were developed to enable insurers and reinsurers to look beyond the latest event loss, so the same models are now required to monitor the protection gap. This is the focus of “protection gap analytics”.

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California Wildfires: Latest Loss Estimates

Kevin Van Leer, senior product manager – Model Product Management, RMS

20:00 UTC Tuesday, October 17

Nearly ten days have passed since the first four wildfires spread rapidly in Northern California. As of Monday, October 16, over 10,000 firefighters battled 14 fires, principally in the wine-growing valleys north of San Francisco. Fires in Napa, Solano, Sonoma, Mendocino, Lake, Yuba, Butte, Fresno, Calveras, Orange and Nevada counties have burned about 213,000 acres (86,000 hectares), destroying about 5,700 structures and forcing the evacuation of over 100,000 people, according to CAL FIRE and local officials. Aerial photographs show whole neighborhoods in northern Santa Rosa destroyed, and a neighborhood of about 70 houses has been destroyed in east Santa Rosa. Reports on Monday, October 16 state that there are 41 recorded fatalities, and hundreds of people are missing.

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Harvey Now Driving Catastrophic Flooding Across Houston Metropolitan Region

(For media statement, click here)

Michael Young, senior director – Product Management, RMS

Hurricane Harvey is now driving catastrophic flooding across the entire Houston Metropolitan region. The behavior of the storm is almost without precedent, and Harvey has already broken all U.S. records for tropical cyclone-driven extreme rainfall with observed cumulative amounts of 51 inches (129 centimeters) – far exceeding Allison in 2001, along with Claudette in 1979, and Amelia in 1978, not only in volume but also regional extent.

While we will continue to refine our modeling parameters for the Category 4 wind and storm surge that Harvey generated on Saturday, our clear focus is now on the inundation of Houston, the fourth largest city in the U.S. The storm has achieved a paradigm shift, and we have mobilized all our capabilities to apply the tools, data and processes developed for the RMS U.S. High Definition (HD) Flood Model to provide insights to the extent and severity of the flooding, with Houston as our top priority.

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