logo image

Accurate, Impactful Catastrophe Models

Increasing uncertainty and more frequent catastrophes are putting your company to the test. Your risk managers have to prepare for a mind-boggling array of perils.

Having accurate, high-quality models is essential. For more than 30 years, that has been a specialty of RMS. Our approach makes all the difference.

Watch Mohsen Rahnama, PhD, CRMO, and EVP of RMS Model Development, discuss the art of building the best models in our Models, Experts, and Coffee series.

What is Catastrophe Modeling

What is Catastrophe Modeling?

Catastrophe modeling allows insurers and reinsurers, financial institutions, corporations, and public agencies to evaluate and manage natural catastrophe risk from perils ranging from earthquakes and hurricanes to flood and wildfire.

Just because an event hasn’t occurred in the past doesn’t mean it can’t or won’t. A combination of science, technology, engineering knowledge, and statistical data is used to simulate the impacts of natural and man-made perils in terms of damage and loss.

Catastrophe Modeling Framework

The basic framework for modeling the impacts of natural hazards on building inventories can be broken down into the following four modules:

Catastrophe Modeling Framework

Event Module


Hazard Module


Vulnerability Module

climate-change-regulation Created with Sketch.

Financial Module

Stochastic Event Module

The first stage of catastrophe modeling begins with the generation of a stochastic event set, which is a database of scenario events. Each event is defined by a specific strength or size, location or path, and probability of occurring or event rate. Thousands of possible event scenarios are simulated based on realistic parameters and historical data to probabilistically model what could happen over time.

Hazard Event Module

The hazard module assesses the level of physical hazard across a geographical area at risk. For example, an earthquake model estimates the level of ground motion across the region for each earthquake in the event set, considering the propagation of seismic energy. For hurricanes, a model calculates the strength of the winds around a storm, considering the region’s terrain and built environment.

Vulnerability Module

The vulnerability module assesses the degree to which structures, their contents, and other insured properties are likely to be damaged by the hazard. Because of the inherent uncertainty in how buildings respond to hazards, damage is described as an average. The vulnerability module offers unique damage curves for different areas, accounting for local architectural styles and building codes.

Financial Module

The financial module translates the expected physical damage into monetary loss. It takes the damage to a building and its contents and estimates who is responsible for paying. The results of that determination are then interpreted by the model user and applied to business decisions.

Raising the Bar in Catastrophe Modeling

Curiosity, passion, and innovation make high-quality models.

Having the best models is key to enable the (re)insurance industry to make crucial decisions. Models inform insurers how to manage risk aggregations, deploy capital, and price insurance coverage. It also allows insurers to demonstrate capital adequacy to rating agencies.

Pillars of High-Quality Models

RMS is on a continuous quest to build high-quality models using the best available data, science, people, and technology.


Tom Sabbatelli-Goodyer, Sr. Manager, Modeling, discusses how we help the insurance market understand and be comfortable with risk.


We continue to add higher resolution data and ensure it is accurate and up to date because model results are only as robust as the quality of the data entered into them.

Model Science

We build comprehensive solutions and calibrate our models using the most recent events by collaborating with clients, institutions, and the scientific community.


Our people bring decades of science, technology, and industry expertise to stay in the forefront of catastrophe modeling and help customers implement risk modeling best practices.

Tech Innovation

We leverage the power and capacity enabled by Cloud-computing environments and latest technologies to conduct intensive data analysis using robust analytics.

Innovation Drives Better Business Decisions

Discover the latest catastrophe modeling advances and hear from RMS specialists in our Models, Experts and Coffee video series.

Japan Typhoon

Models, Experts & Coffee with Arno Hilberts, Vice President of Model Development discusses new insights from the significant typhoon and non-typhoon floods within the last few years.

Europe Inland Flood

Models, Experts & Coffee with Daniel Bernet, Product Manager, discusses one of the costliest natural hazards in Europe.

North American Wildfire

Models, Experts & Coffee with Michael Young, VP of Product Management, discusses how past learning drives innovation.

North Atlantic Hurricane

Models, Experts & Coffee with Jeff Waters, Sr. Product Manager, discusses our ongoing quest for excellence.

Japan Earthquake and Tsunami

Models, Experts & Coffee with Chesley Williams, Sr. Product Director, discusses the correlation of sub perils.

U.S. Earthquake

Models, Experts & Coffee with Bryant Reyes, Product Manager, discusses the importance of partnering with the scientific community.

Europe Severe Convective Storm

Models, Experts & Coffee with Chris Allen, Product Manager discusses the value of three perils into one model.

New Zealand Earthquake

Models, Experts & Coffee with Laura Barksby, Product Manager, discusses how learnings from past events plus the latest science are inform our models.

U.S. Inland Flood

Models, Experts & Coffee with Holly Widen, Sr. Model Specialist, discusses the value of modeling the physical hazard by leveraging HD modeling capabilities.

News and Insights

Reactions North America 2020 Award for “Risk Modeling Company of the Year

Three is a Magic Number: RMS Wins Risk Modeling Company of the…

Many RMS colleagues attended the recent Reactions North America Awards 2020, admirably hosted by Shawn Moynihan, the magazine’s Editor-in-Chief. The virtual awards ceremony was a great opportunity for the industry to come together and celebrate exceptional achievement in what has certainly been an unusual year. And on behalf of RMS®, I am delighted to receive the Reactions North America 2020 Award for “Risk Modeling Company of the Year.” I know that to win this…

Meeting room

RMS September Update: New HD…

After recently launching new High Definition Models™…

Aerial view of city landscape at night

Putting the Power of HD…

At the RMS Exceedance 2020 virtual conference in May,…


RMS and Tokio Marine Holdings,…

London and Tokyo – October 15, 2020 – RMS, the world’s…

Hurricane Laura

Atlantic Hurricane in 2020: Are…

In the midst of the 2020 Atlantic hurricane season,…

value of defense

The Value of Defense

Current flood defenses in the U.K. reduce annual…

Ridgecrest earthquake

Ridgecrest: A Wake-Up Call

U.S. Wildfire

The Flames Burn Higher

New Zealand Earthquake

Opening Pandora's Box

Flood Outlook

U.S. Flood: A Solution for All…

A soggy start to the spring According to the spring…

Risk Analytics

See How RMS Helps Customers Outperform

Latest News: RMS and Tokio Marine Holdings, Inc. Expand and Deepen Global Commercial Partnership. Learn More

close button
Video Title

Thank You

You’ll be contacted by an RMS specialist shortly.

RMS.com uses cookies to improve your experience and analyze site usage. Read Cookie Policy or click I understand.