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NEWARK, Calif. - October 21, 2016 RMS, the world's leading catastrophe risk management firm, estimates that insured losses for the U.S. from Hurricane Matthew will fall between $1.5 and $5 billion. In the Caribbean, RMS estimates that insured losses will fall between $1 and $3 billion, with the highest proportion of the loss emanating from The Bahamas.

Approximately 70 percent of the estimated U.S. loss is to residential lines, while storm surge-driven coastal flooding is estimated to contribute around 30 percent of the all-lines loss - including coverage leakage and an escalation in claims severity for wind-only policies in situations where wind and water hazards co-exist in residential lines of business. Only one of the ten RMS event reconstructions generated a U.S. loss in excess of $4bn. However, the company advises there is still a small possibility that losses could reach as high as $5bn. The RMS estimate does not include losses to the National Flood Insurance Program (NFIP) or to public buildings and infrastructure.

Both loss estimates include property damage and business interruption, caused by wind and coastal flooding upon residential, commercial, and industrial lines of business. For the U.S, auto lines of business are also included.

To produce the RMS loss estimate, the RMS event response team reconstructed Hurricane Matthew’s hazard, calibrating with insights gained from both remote and on-the-ground surveys of the damage by the RMS reconnaissance teams.

Potential non-modeled loss observed during the RMS damage surveys in Florida, the southeast U.S., and The Bahamas, included frequent instances of beach erosion in the southeast U.S. driven by both wind and storm surge, as well as mold growth following the flooding that could escalate the vulnerability of exposures.

RMS surveys show inland flooding will make a significant contribution to overall losses

The damage surveys conducted by the RMS reconnaissance team indicate that severe flooding, driven by storm surge and the record rainfalls will prove to be the largest driver of economic losses in the southeast U.S. However, at this time, the RMS loss estimate excludes damage associated with inland flooding, since a post-event estimation of the impact of inland flooding can only be completed once all inland flooding has concluded – and some rivers remain at flood level.

Since residential inland flood losses are covered by the National Flood Insurance Program (NFIP) or are excluded from insurance coverage, RMS does not expect the private insurance industry to receive a high number of flood claims. However, RMS anticipates that the insurance industry will cover inland flood losses incurred by commercial and industrial exposure, which tend to be covered as part of multi-peril or all risks policies.

Hurricane Matthew’s impacts in the U.S. were not limited to its time of landfall. Over a two-day period, the storm followed a path just off the southeast U.S. coastline. Buoyed by record-setting atmospheric moisture, Matthew deluged much of coastline along its track with torrential rains.

Before reaching the U.S., Hurricane Matthew had already caused significant damage and loss of life in Haiti, Cuba, and The Bahamas.

Tom Sabbatelli, product manager in the RMS hurricane modeling team, said: “In the immediate aftermath of a hurricane, there can exist a degree of uncertainty around loss estimates. Matthew’s track parallel to the southeast U.S. coast put significant amounts of exposure at risk from damaging winds and surge, which exacerbates this uncertainty. Even small variations in our ten wind and storm surge reconstructions over the wide swaths of exposure can have a significant impact on the estimated loss.”

The RMS insured loss estimates for Hurricane Matthew are based upon RMS industry exposure databases, representing insured hurricane exposure in the U.S. and the Caribbean. While informed by analyses performed against the 2011 RMS U.S. and Caribbean Hurricane IEDs, this estimate primarily considers analyses performed against the pre-release version of the 2017 RMS U.S. Hurricane IED, due for release in Spring 2017.

RegionLoss Estimate in U.S.$ MillionsStorm Surge Contribution in U.S.$ Millions

United States 1,500–5,000 300–1,000

Florida 500–2,000 100–500

Southeast U.S. (Georgia, South Carolina, North Carolina) 1,000–3,000 200–500

Caribbean 1,000–3,000 100–200

The Bahamas 1,000–3,000 100–200

Cuba < 100

Haiti < 100

The above table provides the RMS best industry loss estimate by country and U.S. state, including approximate contributions from storm surge damage and are based on the range of losses from the RMS ensemble footprints in version 16.0 of its North Atlantic Hurricane Models.

Related Resources
December 15, 2020
RMS Estimates that Total Insured Losses from the 2020 Western U.S. Wildfires Will Be Between US$7bn – US$13bn

Newark, CA – December 15, 2020 – RMS, the world’s leading catastrophe risk solutions company, estimates insured losses from the record-breaking western U.S. wildfires this season will be between US$7.0 and US$13.0 billion. These losses reflect estimates as of December 1, 2020 and represent an update from the previously estimated losses from fires up to September 20, 2020. The ignition of the highly damaging Glass Fire and additional spread of the CZU and LNU Complex Fires represent the most notable activity in California since September 20. RMS insured losses represent estimates from major wildfires in California, Oregon, Washington, and Colorado at December 1, 2020: Region Insured Losses (USD $ bn) as of 1 December, 2020 Northern California Oregon and Washington Colorado 5.0 - 9.0 1.0 - 3.0 Up to 1.0 The RMS estimate includes losses from property damage, including evacuation and smoke damage, business interruption (BI), and additional living expenses (ALE) across residential, commercial, and industrial lines. Smoke and evacuation are expected to be significant contributors to losses for the wildfires this season, contributing about 20 percent of losses in California and Colorado and about 35 percent in Oregon and Washington. The estimate also accounts for notable post-event loss amplification (PLA) from property damage (25 to 30 percent) and business interruption/ALE (up to 100 percent or greater). The RMS loss estimate is based on detailed modeling of fire spread, ember accumulations, and smoke dispersion of the fires utilizing the U.S. Wildfire High-Definition (HD) Model, part of the North America Wildfire HD Model suite, released in February, 2019. The model covers the entire contiguous U.S. and explicitly simulates ember and smoke to support detailed analysis of the impact of a wildfire beyond historical fire perimeters. The model’s findings were supported by Damage Inspection Specialist (DINS) damage surveys for California Fires, published damage reports from federal and respective state agencies for the Oregon, Washington, and Colorado fires, and the RMS U.S. Wildfire Industry Exposure Database. Michael Young, Vice President, Product Management said: “2020 represents the most destructive fire season on record, in terms of burn area in California. Since August, 69 major fires that exceeded 1,000 burned acres each, have burned so far. Five of the six largest ever California wildfires have occurred in 2020, with over 4.4 million acres burned in total to date. While fires earlier in the season were dominated by ignitions sparked by the intense lightning storm in August, extreme wind-driven fires dominated the last few months. A similar phenomenon resulted in record-breaking fires in Oregon as well this season, with over 20 major fires driven by extreme winds, burning more than 1.2 million acres so far. In October, Colorado experienced its three largest destructive fires with more than 24 major fires burning 850,000 acres in total. Rajkiran Vojjala, Vice President, Model Development said: “This wildfire season reaffirms the growing catastrophic nature of this peril. Wildfire risk is clearly evolving, not only in California, but also in other states, as we observed in Oregon and Colorado. While changing climate patterns have significantly influenced the record-breaking fires this season, several other factors also profoundly affected the ignition potential and expected losses from these events in different ways. Most notable amongst them are the Public Safety Power Shutoff (PSPS) measures undertaken by utilities, preparedness and response of firefighters in Northern California despite COVID-19 challenges, and recent legislative actions governing wildfire claims settlement such as the California Senate Bill 872. RMS is currently engaged with various stakeholders in evaluating these factors and understanding their impact on the emerging risk profile of this peril as part of its wildfire modeling agenda.”   END The technology and data used in providing this information is based on the scientific data, mathematical and empirical models, and encoded experience of scientists and specialists. As with any model of physical systems, particularly those with low frequencies of occurrence and potentially high severity outcomes, the actual losses from catastrophic events may differ from the results of simulation analyses. RMS SPECIFICALLY DISCLAIMS ANY AND ALL RESPONSIBILITIES, OBLIGATIONS AND LIABILITY WITH RESPECT TO ANY DECISIONS OR ADVICE MADE OR GIVEN AS A RESULT OF THE INFORMATION OR USE THEREOF, INCLUDING ALL WARRANTIES, WHETHER EXPRESS OR IMPLIED, INCLUDING BUT NOT LIMITED TO, WARRANTIES OF NON-INFRINGEMENT, MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE. IN NO EVENT SHALL RMS (OR ITS PARENT, SUBSIDIARY, OR OTHER AFFILIATED COMPANIES) BE LIABLE FOR DIRECT, INDIRECT, SPECIAL, INCIDENTAL, OR CONSEQUENTIAL DAMAGES WITH RESPECT TO ANY DECISIONS OR ADVICE MADE OR GIVEN AS A RESULT OF THE CONTENTS OF THIS INFORMATION OR USE THEREOF.

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November 23, 2020
RMS Collaborates with Willis Re and Securian Financial on Launching the First Indemnity-Based Mortality Catastrophe Bond

London, UK – 23rd Nov, 2020 – RMS, the world’s leading catastrophe risk modeling company, collaborated with Willis Re Securities and Securian Financial to launch the new La Vie Re Limited (Series 2020-1) mortality catastrophe bond providing US$100m of reinsurance protection for Minnesota Life Insurance Company, a Securian Financial affiliate.   RMS acted as the modeling agent on the cat bond transaction, providing a view of the risk covered by the bond to investors. RMS used its suite of excess mortality and morbidity models, covering infectious disease pandemics, terrorism, earthquakes, and other perils, including a contribution to the expected loss from the COVID-19 pandemic. Covering the U.S., this is the first indemnity 144A excess mortality bond that models the cedants’ portfolio on a loss ratio basis.   The notes being issued by La Vie Re were launched to cat bond investors, and the full US$100m principal was achieved with a coupon price of 2.85%.    Jin Shah, Client Director, RMS, said: “Investors have warmly welcomed Securian Financial as a new sponsor to the ILS market. Likewise, RMS is pleased to support another new issuer secure reinsurance protection from the ILS market with a novel structure and trigger.   Using our life risk modeling capabilities, RMS developed an indemnity trigger on loss ratios and supported investors’ understanding of the risk, especially on the contribution from the current COVID-19 pandemic. The pandemic outlooks reflect the latest research on vaccine availability, efficacy and distribution, and how this may mitigate the impact of a second, winter wave of COVID-19 infections threatening regions where strict social distancing measures have been relaxed. It was a pleasure to collaborate with Securian Financial and Willis Re Securities and it’s great to see the ILS market continue to support innovation in the market.”  

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October 27, 2020
RMS Appoints Pat McCarthy as Executive Vice President of Sales and Client Development

NEWARK, CA – October 27, 2020 – RMS, the world’s leading catastrophe risk modeling company, announces the appointment of Patrick (Pat) McCarthy as Executive Vice President of Sales and Client Development, with immediate effect.  Pat will lead this global organization for RMS, and brings a successful track record of delivering meaningful innovations and high-value solutions to some of the world’s most revered enterprises.   Pat joins RMS from SAP, where most recently he was Senior Vice President and General Manager of SAP’s Ariba and Fieldglass businesses, focused on enterprise supply chain optimization and risk reduction.  He also supported customers as they moved from legacy solutions to SaaS, always with an eye on value creation.  Pat had been at SAP for 15 years in various senior roles including as COO for a large part of the US business, the Midwest Market Unit. Prior to SAP, Pat spent seven years at Oracle in various leadership roles spanning sales, industry, and solution roles in its JD Edwards and PeopleSoft businesses. Pat started his career with ten years at Frito-Lay and Pepsi-Co, where he held several management roles. Pat will report directly to RMS CEO, Karen White. Karen White, Chief Executive Officer at RMS, said: “Pat is joining at an exciting and challenging time in our industry and at RMS.  He is exceptionally strategic and has earned his stellar reputation for bringing mission-critical innovations and solutions to global customers.  Pat’s impressive approach to deeply understanding the markets and enterprise customers he serves, with an eye on helping them to innovate and on their business outcomes, is aligned with RMS’s mission to be a strong strategic partner for our customers.  Pat’s formidable experience supporting global customers as they leveraged leading-edge  technology and solutions to advance their businesses will be a great asset to RMS and the customers we serve.”  Pat McCarthy added: “I’m very excited to be joining RMS as it’s an honor to work for a company so focused on building resilience into businesses and economies.  For 30 years, RMS’s science and models have been the most trusted view of risk in the industry.  It’s more important now than ever before that clients have access to the best modeling science and platforms, helping them drive business results that exceed their expectation.  I’m pleased to be leading a team that continues to leverage our core strengths and simultaneously maps out a future with our clients that leverages innovations and the latest science as we tackle the future of risk.” 

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About RMS

Risk Management Solutions, Inc. (RMS) helps insurers, financial markets, corporations, and public agencies evaluate and manage global risk from natural and man-made catastrophes, including hurricanes, earthquakes, floods, climate change, cyber, and pandemics.

RMS helped pioneer the catastrophe risk industry, and continues to lead in innovation by marrying data and advanced model science with leading-edge SaaS technology. Leaders across multiple industries can address the risks of tomorrow with RMS Risk Intelligence™ (RI), our open, unified cloud platform for global risk, enabling them to tap into RMS HD models, rich data layers, intuitive applications, and APIs.

Further supporting the industry's transition to modern risk management, RMS spearheaded the Risk Data Open Standard (RDOS), a new modern open standard data schema designed to be an extensible, flexible, and future-proof asset within modeling/analysis systems.

RMS is a trusted solutions partner enabling effective risk management for better business decision making across risk identification and selection, mitigation, underwriting, and portfolio management.

Visit RMS.com to learn more and follow us on LinkedIn and Twitter.

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+1 551 226 1604 prteam@rms.com
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