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More detailed exposure map

More accurate​ weighting of exposure

​Better risk selection​ with customized view of losses

The Challenge – Assessing for Flood and Windstorm Risks

A broker for a leading U.S. renewable energy provider needed to help its client understand the insurable windstorm and flood risks for a solar farm built to supply domestic commercial clients.

Solar farms are typically modeled as a single risk based on one centroid or geocoordinate, even though solar facilities feature multiple constituent locations and different construction types and occupancies. That single point dictates the combined total insurable value (TIV) of a plant’s solar panels, switchyards, and substations.

If the centroid falls within a low-hazard area of the modeled risk, then pricing of the risk will not be accurately benchmarked against the true exposure. Additionally, the exposure was further complicated by the site’s location in a low-lying area, adjacent to a reservoir.

RMS was asked by the insured’s broker to provide a more accurate view of the risk to better understand both flood and wind exposures across the 2,700-acre plant and to tailor the associated insurance coverage more effectively.

The Solution – Exposure Disaggregation

Rather than modeling the risk as a single geocoordinate, RMS Analytical Services conducted extensive analysis of the facility’s footprint. The team redistributed the entire solar plant into multiple locations, each with its own centroid coordinate.

Solar Farm

The Analytical Services team then used a quantum geographic information system (QGIS) tool to read the files submitted by the client and divided the single location into smaller parcels. Each solar panel was represented by multiple grid points, with additional single points for the switchyard and substations. The team also reviewed the plant schematics to determine the appropriate height for the solar panels.

Using the RMS® U.S. Inland Flood HD Model, the team modeled the risk based on 19 locations rather than one centroid. The RMS Industrial Facilities Model was also used to analyze the characteristics of the on-site facilities.

This new configuration meant each constituent risk could be more accurately represented. Also, the exposure value could be distributed to generate a more precise representation of the solar plant, with higher weights applied to the switchyard and substations. Finally, the team was able to provide a complete view of defended and undefended risks.  

The Outcome – More Complete View of Risk Improves Pricing

The Analytical Services team was able to help the broker quickly adopt a more comprehensive and targeted approach to modeling the complex risk. The broker was now more confident of the modeled losses, which were more in line with actual losses at the site.

By relying on the expertise of RMS Analytical Services to assess this kind of specialized risk, the broker could then help its client understand the site’s risks in greater depth. RMS analytics gave the broker the flexibility to adjust defense assumptions and apply additional information about flood mitigation to generate a tailored view of risk.

The revised view of the risk increased the annual average loss (AAL) for flood by nearly 230 percent, drastically changing the solar farm’s loss assumptions and giving it a measurable basis for premium loadings to reflect the altered risk profile. The AAL for windstorm increased by only 2 percent but confirmed an understanding of the site’s exposure.

Key Results
  • More detailed exposure map that included previously underestimated flood risk
  • More accurate weighting of exposure based on multiple gridded points for panels and additional single points for the switchyard and substations, rather than a single centroid
  • Better risk selection with customized view of defended and undefended losses
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