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TOKYO, Japan - May 02, 2018  RMS, the leading global risk modeling and analytics firm, announced today the release of its new Japan Earthquake and Tsunami High Definition (HD) model. RMS has collaborated with local experts, scientific agencies and insurers to develop a model that offers a more complete and detailed representation of earthquake and tsunami risk in Japan. The new model incorporates key research advancements from the 2017 Japan Seismic Hazard Maps, as well as lessons learned from the 2011 Tohoku Earthquake and the 2016 Kumamoto Earthquakes.

The 2011 Tohoku earthquake had an event magnitude of 9.0, which was significantly greater than expected based on Japan Seismic Hazard Maps published at the time. The Tohoku earthquake also initiated a series of devastating tsunami waves; highlighting the importance of sub-perils to the quantification of the financial risk of large offshore earthquakes.

Following the 2011 event, the Japanese Headquarters for Earthquake Research Promotion (HERP) oversaw extensive research studies on key subduction zones surrounding Japan and driving the seismic hazard and risk. The new model was developed through extensive evaluation of this research, so it provides a unique, robust point of view for earthquake hazard in Japan.

Leveraging detailed damage statistics and claims data from recent events, the new model assesses building performance due to ground shaking, tsunami inundation, fire following earthquake, liquefaction and landslides. These are all considered in terms of losses for buildings, contents, business interruption, industrial facilities and builders risk. The new model includes explicit modeling of post-event loss amplification.

The model captures the current local building codes and construction practices, which reflect the building stock distribution in Japan. Additionally, based on recent major liquefaction events in New Zealand, the liquefaction model framework has been redesigned using Japan-specific data to more accurately assess liquefaction risk at a local level.

The new HD model allows for better integration of models into pricing and underwriting to help improve risk selection. This innovation enables more precise selection and pricing of risks. The market-leading HD Financial model provides for flexible and transparent loss calculations and can assess Japan specific policies and terms (e.g. step policy). This powerful HD financial engine allows for an easier understanding of how losses are flowing through contracts which enables additional insight into contribution metrics and key drivers of risk.

Mohsen Rahnama, chief risk modeling officer, RMS said: “Our new model is more transparent and allows for a more realistic representation of claims processes and payout. The Japan Earthquake and Tsunami HD Model provides a comprehensive view of earthquake risk for Japan, with the flexibility to meet the requirements of the evolving catastrophe risk management market. Japan is one of the most seismically active areas in the world. Our new model offers a greater understanding of these risks, as well as improved risk differentiation, enabling better underwriting and risk management decision making.”

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September 23, 2021
RMS Estimates US$1.1 – $2.2 Billion in Total U.S. Insured Losses from Hurricane Nicholas

Newark, CA – September 23, 2021 – RMS®, the world’s leading catastrophe risk solutions company, estimates that the total U.S. insured losses from Hurricane Nicholas to be between US$1.1 and US$2.2 billion. This estimate represents insured losses associated with wind, storm surge, and precipitation-induced flooding, including losses to the National Flood Insurance Program (NFIP). Nicholas made landfall on September 14, 2021 near Sargent Beach, Texas as a Category 1 hurricane on the Saffir-Simpson Hurricane Wind Scale with maximum sustained winds of 75 miles per hour (120 km/h). The storm brought hurricane-force winds, prolonged heavy rainfall to the central Gulf Coast, including many areas in southern Louisiana still recovering from Hurricane Ida, as well as Hurricanes’ Laura and Delta (2020). Total insured loss estimates for Hurricane Nicholas (US$ billions): Wind + Surge Private Inland Flood NFIP Total 0.7 – 1.4 0.2 – 0.3 0.2 – 0.5 1.1 – 2.2   RMS estimates US$700 million to US$1.4 billion in privately insured wind and storm surge losses based on analysis of ensemble footprints in Version 21 of the RMS North Atlantic Hurricane Models. RMS ensemble footprints are reconstructions of Nicholas’ hazard that capture the uncertainties surrounding observed winds and storm surge. The precipitation-induced inland flooding losses were generated using footprints from the RMS U.S. Inland Flood HD Model. RMS modelers developed and validated the wind, storm surge, and inland flood reconstructions and corresponding loss estimates using publicly available observations, including wind stations, rivers water level gauge data, and web reconnaissance. “A notable impact from this event is the rainfalls, especially in Louisiana, where many towns and cities are still in the early stages of recovery after Hurricane Ida. RMS event response teams estimate roughly 40 percent of postal codes in Louisiana that were impacted by flooding in Nicholas were also impacted by flooding from Ida a few weeks earlier. We expect the overlapping nature of these two storms to further amplify losses, including the risk of rainfall infiltration, and to prolong the claims settlement process,” says Jeff Waters, Senior Product Manager, RMS North Atlantic Hurricane Models. The estimate also includes US$200 – $500 million in losses for NFIP in Texas and the Gulf of Mexico region. NFIP losses were derived using RMS’ view of NFIP exposure based on 2019 policy-in-force data published by FEMA, Version 21 North Atlantic Hurricane Models, and the U.S. Inland Flood HD Model. Losses reflect property damage and business interruption to residential, commercial, industrial, and automobile lines of business, and considers sources of post-event loss amplification (PLA).  RMS expects the majority of wind and storm surge losses to come from Texas, and the majority of the NFIP and insured flood losses to come from Louisiana. Hurricane Nicholas was the fourteenth named storm of the 2021 North Atlantic hurricane season and the sixth hurricane. It was the second hurricane to make landfall this season. RMS industry loss estimates for landfalling hurricanes are comprehensive, reflecting modeled and non-modeled impacts from all major drivers of damage, including wind, storm surge, and inland flooding. 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 THIS 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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September 16, 2021
RMS Estimates US$31– $44 Billion in Total U.S. Onshore and Offshore Insured Losses from Hurricane Ida

Newark, CA – September 16, 2021 – RMS®, the world’s leading catastrophe risk solutions company, estimates total onshore and offshore U.S. insured losses from Hurricane Ida to be between US$31 and US$44 billion. The estimate builds upon the earlier industry loss estimate of US$25-$35 billion for the Gulf of Mexico region, to include inland flooding impacts in the Ohio Valley, Mid-Atlantic, and Northeast U.S. regions. RMS estimates US$6–$9 billion in insured losses from precipitation-induced flooding in the Atlantic states in this event. The majority of the insured flood losses in the Ohio Valley, Mid-Atlantic, and Northeast U.S. – between US$4.5 and US$7.0 billion, will be to the private market, with an additional US$1.5–$2.0 billion to the National Flood Insurance Program (NFIP). Total U.S. onshore and offshore insured loss estimates for Hurricane Ida (US$ billions):   Wind + Surge Inland Flood NFIP Offshore Energy Total Gulf 21 - 28 1.0 - 1.5 2.3 - 4.0 0.7 - 1.5 25 - 35 Ohio Valley, Mid-Atlantic, Northeast U.S. n/a 4.5 - 7.0 1.5 - 2.0 n/a 6 - 9 Total U.S. Onshore and Offshore 21 - 28 5.5 - 8.5 3.8 - 6.0 0.7 - 1.5 31 - 44 The overall industry loss estimate for this event includes wind and storm surge losses in the Gulf of Mexico based on analysis of ensemble footprints in Version 21 of the RMS North Atlantic Hurricane Models. RMS ensemble footprints are reconstructions of Ida’s hazard that capture the uncertainties surrounding observed winds and storm surge. The industry estimate also includes impacts from precipitation-induced inland flooding in the Gulf Coast states (Alabama, Florida, Louisiana and Mississippi), Ohio Valley, Mid-Atlantic, and Northeast regions, using footprints from the RMS U.S. Inland Flood HD Model. “Ida will be remembered as a wind and storm surge event in the Gulf of Mexico, and a flood event in the Mid-Atlantic and Northeast U.S. The storm’s remnants brought historic amounts of rainfall over just a few hours to some of the most exposure-dense areas in that part of the country. Many locations from Philadelphia to New York City experienced six-hourly rainfall totals in excess of 100-year return period levels, which is beyond building design standards in that region, causing widespread fluvial and pluvial flooding. The fact that this region also experienced heavy rainfall from Tropical Storm Henri a few weeks prior created saturated antecedent conditions that exacerbated the extent and severity of flooding in Ida,” said Jeff Waters, Senior Product Manager, RMS North Atlantic Hurricane Models. Losses for the Ohio Valley, Mid-Atlantic, and Northeast regions reflect property damage and business interruption to residential, commercial, industrial, and automobile lines of business, as well as sources of post-event loss amplification and leakage of flood losses onto windstorm policies. “RMS expects insured losses associated with precipitation-induced inland flooding to be material in the Mid-Atlantic and Northeast, even though a sizable flood protection gap remains. RMS estimates total economic losses from flooding in this region to be over US$15 billion, meaning that the majority of flood damages for this event will be uninsured. Many properties in New York and New Jersey had inundated basements in areas outside the designated FEMA special flood hazard areas (SFHAs), which drive the requirement for homeowners to obtain a flood insurance policy. While such losses will unlikely be covered unless they have a flood insurance policy, the pressure to expedite claims processing in this region is likely to cause coverage leakage as frequently seen with storm surge. We expect a portion of the uncovered flood-related losses in Ida to be paid out on wind policies, especially for residential lines without NFIP coverage,” said Firas Saleh, Director, RMS U.S. Inland Flood HD Model. Total insured losses from Ida reflect property damage and business interruption to residential, commercial, automobile, industrial, infrastructure, marine cargo and specie, watercraft, and other specialty lines of business, along with post-event loss amplification (PLA) and non-modeled sources of loss. “We expect a sizable portion of the overall insured losses from Ida to be associated with post-event loss amplification. A combination of COVID-19 related impacts, including rising construction costs, labor shortages, and fewer loss inspections could contribute to economic demand surge as repairs are undertaken in the coming months. That, along with prolonged power outages will only lengthen recovery and repair times, all of which may lead to increased overall claim costs in this event,” said Rajkiran Vojjala, Vice President, Model Development, RMS. The total U.S. insured loss estimate includes US$3.8–US$6 billion losses to the NFIP, with US$1.5–US$2 billion expected to come from the Ohio Valley, Mid-Atlantic, and Northeast states. NFIP losses were derived using RMS’ view of NFIP exposure based on 2019 policy-in-force data published by FEMA, the Version 21 North Atlantic Hurricane Models, and the U.S. Inland Flood HD Model. While flood policy take-up is significant in coastal areas in the Mid-Atlantic and Northeast, some of the areas worst affected by floods during Ida have minimal (<10%) NFIP participation. RMS expects the majority of onshore insured losses from Ida to be driven by wind, followed by inland flooding, and then storm surge. Additionally, insured wind losses will be driven by residential lines, and insured water losses will be dominated by commercial and industrial lines. Insured losses to infrastructure, watercraft, and marine cargo and specie lines in Ida will be less than US$1 billion. Based on the August 2021 vintage of the RMS Offshore Platform Industry Exposure Database, and modeled ensemble footprints, RMS estimates insured losses to offshore platforms, rigs, and pipelines in the Gulf of Mexico from wind and wave damages to be between US$0.7–US$1.5 billion. Outside of the U.S., Ida impacted parts of the Caribbean, including Cuba, Jamaica, and the Cayman Islands, with strong winds, heavy rain, and flash flooding. RMS estimates less than US$100 million in insured losses from the event in the Caribbean. Ida made landfall near Port Fourchon, Louisiana on Sunday, August 29 as a Category 4 hurricane on the Saffir-Simpson Hurricane Wind Scale. At landfall, Ida produced sustained winds of 150 miles per hour (241 km/h), according to the National Hurricane Center. As Ida moved northward toward the Tennessee River Valley, it weakened and eventually transitioned to a post-tropical cyclone before impacting the Mid-Atlantic and Northeast regions with torrential rain and flash flooding. Hurricane Ida was the ninth named storm of the 2021 North Atlantic hurricane season, the fourth hurricane, and the fifth named storm to make landfall in the U.S. this season. Ida was also the fourth hurricane to make landfall in Louisiana since 2020, following Hurricanes’ Laura, Delta, and Zeta. Over two months remain in the 2021 Atlantic hurricane season, which officially ends on November 30. RMS industry loss estimates for landfalling U.S. hurricanes are comprehensive, reflecting modeled and non-modeled impacts from all major drivers of damage, including wind, storm surge, and inland flooding.     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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About RMS

Risk Management Solutions, Inc. (RMS) shapes the world's view of risk for insurers, reinsurers, financial services organizations, and the public sector. We empower organizations to evaluate and manage global risk from natural and man-made catastrophes, including hurricanes, earthquakes, floods, climate change, cyber, and pandemics. RMS models underlie the nearly US$2 trillion Property & Casualty industry and many insurers, reinsurers, and brokers around the world rely on RMS model science.

RMS helped pioneer the catastrophe risk industry, and continues to lead in innovation by offering unmatched science, technology, and 300+ catastrophe risk models. Leaders across multiple industries can address the risks of tomorrow with RMS Risk Intelligence™ (RI), our open, unified cloud platform for global risk, which enables 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 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.

(C) 2021 Risk Management Solutions, Inc. RMS, the RMS logo, and RMS Risk Intelligence are trademarks of Risk Management Solutions, Inc. All other trademarks are property of their respective owners.

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