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.

Watch Video

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.


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.


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.

Consulting Services

Liz Couchman, Sr. Director, Consulting, discusses how RMS Consulting can help customers achieve their goals.

Japan Typhoon

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

Daniel Bernet, Product Manager, discusses one of the costliest natural hazards in Europe.

Consulting Services

Megan Arnold, Sr. Consultant, discusses how RMS can help customers build a superior risk strategy.

North American Wildfire

Michael Young, VP of Product Management, discusses how past learning drives innovation.

North Atlantic Hurricane

Jeff Waters, Sr. Product Manager, discusses our ongoing quest for excellence.

Japan Earthquake and Tsunami

Chesley Williams, Sr. Product Director, discusses the correlation of sub perils.

U.S. Earthquake

Bryant Reyes, Product Manager, discusses the importance of partnering with the scientific community.

Europe Severe Convective Storm

Chris Allen, Product Manager discusses the value of three perils into one model.

New Zealand Earthquake

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

U.S. Inland Flood

Holly Widen, Sr. Model Specialist, discusses the value of modeling the physical hazard by leveraging HD modeling capabilities.

News and Insights

Aerial image of flooded community
Season of Flood: Flood Risk Is Complex. Managing It Shouldn’t Be.

As the world has witnessed, the recent catastrophic flooding, and resulting loss of life and damage across Germany, Belgium, and neighboring countries has again underlined the devastating nature of severe flood events, and as a risk modeling business, it reminds us of the need to understand all aspects of this peril. What progress are we making on helping clients and wider stakeholders understand flood risk? RMS® has been modeling flood risk for over 20…

Tohoku earthquake
Exposure Magazine
The Earthquakes That Changed Everything

In the decade since the devastating 2011 Tohoku and Christchurch Earthquakes, risk modelers such as RMS have been proactive in honoring the data generated from these events. It is a process of continuous learning and refinement, explains Chesley Williams and Laura Barksby from RMS, and the journey is still ongoing Within the space of just 17 days in 2011, Christchurch in New Zealand was rocked by an M6.3 earthquake — almost directly beneath the central…

Map with pinned location
Exposure Magazine
Location, Location, Location: A New Era in Data Resolution

The insurance industry has reached a transformational point in its ability to accurately understand the details of exposure at risk. It is the point at which three fundamental components of exposure management are coming together to enable (re)insurers to systematically quantify risk at the location level: the availability of high-resolution location data, access to the technology to capture that data and advances in modeling capabilities to use that data. …

Gold background
InsuranceAsia News Awards: Time to Celebrate Excellence

Our partners in the insurance media have adapted admirably to the virtual world we all have currently found ourselves in, and I applaud the team at InsuranceAsia News for their livestreamed Awards for Excellence 2020 ceremony recently held on Twitter. On behalf of everyone at RMS®, and especially the teams focused on the Asia-Pacific region, we were delighted to receive the Risk Modeler of the Year Award for Excellence 2020. Although we can’t physically meet in…

Japan Earthquake Damage
Japan Seismic Risk: Don’t Forget the Faults!

Japan and more specifically Tokyo lie at the intersection where the Pacific and Philippine Sea tectonic plates are pushed under Eurasia. It is not surprising then that megathrust earthquakes along these tectonic plate boundaries drive the seismic risk in this region with their large magnitudes and relatively short return periods. It is important to understand that the story of seismic risk does not end there. In Japan, like many other places around the world…

Typhoon Faxai
Typhoon Faxai: Strongest Typhoon to Impact Greater Tokyo in Fifteen Years

Power outages in Chiba Prefecture looked set to continue into the coming weeks as the region continues to recover from Typhoon Faxai. It was one of the strongest landfalling typhoons on record in the seven prefectures of the Kanto region surrounding Tokyo and the strongest to impact the Greater Tokyo area since Typhoon Ma-on in 2004. Two Landfalls as Faxai Travels Across Tokyo Bay Typhoon Faxai made a brief landfall over the Miura Peninsula, Kanagawa…

Contact Us

See How RMS Helps Customers Outperform

close button
Overlay Image
Video Title

Thank You

You’ll be contacted by an RMS specialist shortly.