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NEWARK, Calif. - October 31, 2018  RMS, the leading global risk modeling and analytics firm, announces the release of its US Inland Flood High Definition (HD) model. Flood is the most frequent and widespread peril in the U.S. and has historically been difficult to model and insure due to its relative complexity and the lack of quality data available. RMS has leveraged extensive expertise in flood modeling to bring to market an innovative solution that solves for these existing market challenges. The new RMS US Inland Flood HD Model accounts for all types of inland floods, including those induced by both tropical cyclone and non-tropical cyclone rainfall, and is coupled with the RMS North Atlantic Storm Surge Model to provide a comprehensive view of inland flood risk alongside hurricane-driven coastal flood and wind risk.

Recent events such as Hurricane Harvey and Hurricane Florence have driven increased awareness around the potential flood risk across the US along with the large gaps that currently exist in coverage. There is immense opportunity for the insurance industry to grow the US Flood market, but this requires leveraging the right tools to understand and accurately assess this risk.

Vice President, Dr. Pete Dailey, commented: “The market demand for flood insurance is growing, but to date the industry has lacked a tool to enable a rigorous and comprehensive treatment of all sources of flood risk. We are excited that our investment of over 60 man-years of development effort have culminated in a tool that meets this broad market requirement.” RMS HD Inland Flood Model also takes the challenge of data availability head on, with first-of-its-kind capabilities to account for key drivers of flood risk, including employing intelligent modeling techniques to account for key structural attributes such as first floor height and basement characteristics. The model also includes the first market-wide solution to account for the presence of all defenses that help mitigate flood risk, even in the absence of this information being available in public datasets.RMS Vice President, Arno Hilberts, stated: “This model is based on state-of-the-art hydrodynamical modeling, and is the first of its kind to be explicitly calibrated to a both depth and flow observations, and validated using flood zone and flood depth information from FEMA, as well as detailed claims data. This makes is unique, and enables our clients to use the model all the way from portfolio-management to the point of underwriting.”

The new HD model considers all these key drivers and mitigators of flood and leverages robust vulnerability relationships to precisely translate flood hazard to physical damage and financial costs for a full range of residential, commercial and industrial structures.

The new HD Financial model facilitates understanding of cross-peril correlation with the ability to appropriately capture seasonality impacts, and accurately and flexibly model time-dependent reinsurance policy terms. Such innovations facilitate risk differentiation and competitive underwriting and pricing to quickly optimize risk selection, while managing and ultimately growing a profitable portfolio.

Expectations are that the flood market will continue to present opportunity to (re)insurers equipped with the most versatile modeling solutions. RMS Chief Risk Modeling Officer, Dr. Mohsen Rahnama commented: “With the NFIP’s recent removal of the non-compete clause for Write-Your-Own carriers, and it’s pending reauthorization in November, we are hopeful that private participation in the flood insurance market will only increase. As the market evolves, those writing flood insurance will rely on a model that allows them to accurately capture the full range of potential losses from inland and coastal flooding.”

What is new in Version 18?

  • Terrorism: Updated scenario model including updates to targets database for US, UK and Belgium; updates to hazard footprints and changes to the default time of day, to react to changes in peak times across different occupations.
  • Australia Cyclone: Model update includes the most recent market and meteorological data and lessons learned from recent events, such as Cyclone Yasi in 2011, Cyclone Marcia in 2015 and Cyclone Debbie in 2017. The update also accounts for the rise in properties at risk, with the number of dwellings within 200km of the coast increasing by 15% between 2006 and 2016.
  • Australia Earthquake: Model update reflecting the latest scientific view of seismic hazard by incorporating data from the 2018 national seismic hazard map from Geoscience Australia. Updated event rates and ground motion models, combined with insight from local experts, provide the most up-to-date view of seismic risk in the country.
  • Philippines Typhoon: The Philippines is one of the most disaster-prone countries in the world, with around 20 cyclones per year, and eight of these making landfall. New model capturing risk from wind and flooding, coastal storm surge and season precipitation-driven flooding. The model expands the RMS suite of climate modeling solutions to the Philippines.
  • India Flood: New fully probabilistic Flood model. Flooding is the most significant natural hazard affecting India, comprising of about three-quarters of natural catastrophe losses. The new model combines the latest science with local engineering expertise, with an event set based on 125,000 events across 9,033 catchments throughout India; accounting for monsoon rainfall and expanding areas of impermeable ground in major cities such as Mumbai, Chennai and Delhi.
  • India Earthquake: Update with high resolution geotechnical information for hazard amplification to differentiate risk. Over a thousand vulnerability functions are included with additional solutions for underwriting key exposures such as industrial facilities, buildings under construction, and marine cargo and specie risks. The financial model includes additional losses from landslide and liquefaction hazards.
  • South Korea Earthquake: New model model covers ground shaking, liquefaction, and landslide risk, enabling users to comprehensively assess earthquake risk in South Korea. While events in this region are relatively rare, they have the potential to be damaging. In 2016 the Mw 5.4 Gyeongju Earthquake hit and in 2017 the Mw 5.4 Pohang Earthquake occurred close to the city of Pohang, damaging more than 23,000 buildings.
  • Marine Cargo: Update allowing detailed insight into cargo fragility and exposure accumulation, enabling the identification of vulnerable concentrations of static cargo, the measurement of port accumulations, and the analysis of loss severity for key events.
  • North America Hurricane: Storm surge update incorporating new methods and data made available since the last U.S. storm surge model update. This enhances risk differentiation between defended and undefended areas prone to storm-surge. Also included are defense assumptions and wave treatment within the storm surge hazard module, as well as basement functionality and first floor height assumptions within the vulnerability module.
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.

Media Contacts

Matthew Longbottom

PR Lead, EU and APAC
+44 20 7444 7706 prteam@rms.com

Devonne Cusi

PR Lead, Americas
+1 551 226 1604 prteam@rms.com
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