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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

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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.

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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. 

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

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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.

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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.

New Zealand Earthquake
New Zealand Earthquake

Quantifying losses at the location-coverage level enables robust loss calculations and policy modeling.

U.S. Earthquake
U.S. Earthquake

Seamless seismic source coverage across the U.S., understanding major effects of liquefaction.

U.S. Inland Flood
U.S. Inland Flood

Complex hydrodynamics, hazard sources, steep gradients, flood defense impacts, and individual building vulnerability.

News and Insights


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London and Tokyo – October 15, 2020 – RMS, the world’s leading catastrophe risk solutions company, and Tokio Marine Holdings, Inc., are pleased to announce that they are expanding and deepening their global commercial partnership through a new agreement.  RMS models underlie Tokio Marine’s global view of natural catastrophe risk, and Tokio Marine entities have access to a range of RMS RiskLink® and HD™ models as well as RMS Risk Intelligence™ products. The…

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

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