Paul Wilson, vice president – Model Development, RMS
This morning, the RMS Event Response team has started to assess major damage in the Caribbean caused by Hurricane Irma, which has become the strongest Atlantic hurricane on record.
Our preliminary modeling for the Caribbean provides insights into the potential range of damage outcomes for each island that we understand to be impacted, including Antigua and Barbuda, British Virgin Islands, Anguilla, Saint Maarten and Saint Martin. It is already clear that damage ratios are high, particularly in Barbuda.
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.
Hot on the heels of Hurricane Harvey, Irma looks like it could be the second major landfall in the U.S. this season, as it currently moves towards the Caribbean as a category 5 hurricane, with sustained winds around 185 miles per hour (297 kilometers per hour).
As always, the RMS Event Response starts early in the life of tropical storms, to provide the latest commentary, following up with RMS HWind footprints as data becomes available and providing initial sets of stochastic event selections around 48 hours before landfall. RMS Event Response practices have been designed to best serve our clients and the industry as a whole, and speculation of industry losses whilst such uncertainty remains can be counterproductive. Clients can see full information on the RMS Event Response processes by reading the following document available on RMS Owl.
With Irma moving swiftly through the Caribbean as a Category 5 hurricane, currently producing sustained winds around 185 miles per hour (297 kilometres per hour), concern is building as to the potential impacts of another major hurricane landfalling in the U.S. Although Irma’s actual path as it approaches Florida is very uncertain, there are analytical techniques available to help gain insight into the range of potential damage.
The RMS Cat in a Box (CIAB) application is designed for the assessment of parametric contracts, and can evaluate the probability of storms intersecting a specific geographic region whilst having certain severity characteristics. The application will output the list of events which intersect these areas and produce the associated Exceedance Probability (EP) curve.