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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
October 15, 2020
RMS Estimates Hurricane Delta Onshore Losses at $2bn-$3.5bn

October 15, 2020
RMS Estimates that Total Onshore U.S. Insured Losses from Hurricane Delta Will Be Between US$2bn – US$3.5bn

Newark, CA – October 15, 2020 – RMS, the world’s leading catastrophe risk solutions company, estimates total onshore U.S. insured losses from Hurricane Delta to be between US$2.0bn and US$3.5bn. The estimate includes losses to the National Flood Insurance Program (NFIP) of between US$200m and US$400m. U.S. insured loss estimates for Hurricane Delta (US$ billions): Wind & Surge Inland Flood NFIP Total 1.7 - 2.8 0.1 - 0.3 0.2 - 0.4 2.0 - 3.5 This estimate includes wind, storm surge, and inland flood losses across the impacted states, including Louisiana, Texas, and Mississippi, based on analysis of RMS ensemble footprints in Version 18.1 of the RMS North Atlantic Hurricane Models and estimates from the RMS U.S. Inland Flood HD Model. RMS ensemble footprints are reconstructions of Delta’s hazards that capture the uncertainties surrounding observed winds and storm surge. The RMS estimate includes a 15% reduction in insured onshore losses due to the cumulative impacts of Hurricane Laura, which damaged much of the same region six weeks earlier. “The overlapping nature of Delta and Laura will create a complicated claims management and loss attribution process for the industry. Using an innovative combination of high-resolution aerial imagery and machine-learning techniques, the modeling teams at RMS assessed the competing impacts of Hurricane Laura on Hurricane Delta losses. We determined that more than half of the impacted postal codes were also impacted by Laura, representing more than 90% of loss in this event. While Delta caused higher than expected damage to many structures due to pre-existing damage from Laura, reduced overall exposure-at-risk in the overlapping region after Laura means losses attributed to Delta will end up being lower than if Laura had never happened,” said Jeff Waters, senior product manager, RMS North Atlantic Hurricane Models.  Losses reflect property damage and business interruption to residential, commercial, industrial, and automobile lines of business, along with post-event loss amplification (PLA) and non-modeled sources of loss. RMS expects most insured losses will be from residential lines. The estimate also includes losses to the National Flood Insurance Program (NFIP) in the range of US$200 million to US$400 million. NFIP losses were derived using the RMS view of NFIP exposure based on 2019 policy-in-force data published by FEMA, the Version 18.1 North Atlantic Hurricane Models, and the U.S. Inland Flood HD Model. In Mexico, RMS estimates insured losses from Delta to be less than US$500 million. The estimate reflects wind losses based on analysis of RMS post-landfall stochastic event tracks in Version 18.1 of the RMS North Atlantic Hurricane Models. The estimate for Mexico includes property damage and business interruption to residential, commercial, and industrial lines of business. Additionally, RMS estimates insured losses to offshore platforms, rigs, and pipelines in the Gulf of Mexico to not exceed US$1.0bn from wind and wave-driven damages. Offshore losses are based on the October 2020 vintage of the RMS Offshore Platform Industry Exposure Database. “Unlike Laura, which impacted several deepwater oil and gas platforms earlier in the season, we expect offshore losses from Delta to be driven mainly by shallow water platforms. The storm shut in oil and gas production in the region up to levels not seen since Hurricanes Katrina, Rita, and Ike. However, Delta’s lower intensity and size while in the Gulf limited the wave heights and consequently, offshore losses are expected to be notably lower than those experienced in the 2005 and 2008 events,” said Rajkiran Vojjala, Vice President, Model Development.  Delta made landfall near Creole, Louisiana on Friday, October 9, 2020 as a Category 2 hurricane on the Saffir-Simpson Hurricane Wind Scale. At landfall, Delta produced sustained winds of 100 mph (160 km/h), according to the National Hurricane Center. Informed by a suite of real-time observational data sources, RMS HWind products estimated comparable winds at landfall. Delta's landfall location and intensity were well-represented by the HWind forecasting products more than 72 hours before the storm crossed into Louisiana. “As expected, Delta weakened from major hurricane status to a weaker Category 2 storm just before landfall due to a combination of conditions, including high wind shear and cooler sea surface temperatures, both of which restrain a hurricane’s intensity. However, winds strong enough to cause damage expanded in width, increasing the number of coastal properties at risk. Fortunately, Delta rapidly weakened after landfall, which reduced the material wind and water-driven impacts across interior portions of the Gulf states,” said Pete Dailey, Vice President, Model Development. Hurricane Delta was the twenty-fifth named storm of the 2020 North Atlantic hurricane season, the ninth hurricane, and the fifth U.S. landfalling hurricane of this very active season. Delta was a record-breaking tenth named storm to make landfall in the contiguous U.S. so far in 2020, and a record-tying fourth named storm of 2020 to make landfall in Louisiana. Over six weeks remain in the Atlantic hurricane season, officially ending on November 30. RMS industry loss estimates for landfalling U.S. hurricanes are comprehensive, reflecting modelled and non-modelled impacts from all major drivers of damage, including wind, storm surge, and inland flooding.   ENDS The technology and data used in providing the information contained in this press release are 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 CONTENTS 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.

October 15, 2020
RMS and Tokio Marine Holdings, Inc. to Expand and Deepen Global Commercial Partnership

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 goal of the partnership is to ensure that the highest quality, most accurate, best-science, data and technology-based views of risk across all perils and markets where Tokio Marine participates are leveraged to the benefit of Tokio Marine customers worldwide.  Through the partnership, RMS models, data and applications, along with the RMS cloud platform, Risk Intelligence, may be leveraged by Tokio Marine entities globally. Tokio Marine has been a longstanding industry leader and partner with RMS, with the relationship spanning over 20 years.  Tokio Marine partnered with RMS on the development of the Japan Earthquake and Japan Typhoon models, providing knowledge and insights to the benefit of the modelled views of those risks, the partnership, as well as the market at large.  In addition to RMS RiskLink models, Tokio Marine has also licensed and is adopting the current suite of RMS high-definition (HD) models, which includes the Japan Typhoon and Flood HD Model, and the Japan Earthquake and Tsunami HD Model. Tokio Marine was an early adopter of RMS Risk Modeler™ and Exposure Manager™ solutions and is working towards adoption of the latest version, Risk Modeler 2.0, as it deploys new HD models. All RMS RiskLink models, together with HD models, are deployed on cloud-based Risk Modeler as of the September 30, 2020 release, along with portfolio and account modelling and analytics.  Kenji Okada, Group Chief Risk Officer, Tokio Marine Holdings, Inc. said: “RMS has been an important strategic partner for many years and has consistently demonstrated its commitment to investing in better science and technology for the insurance industry. We look forward to continuing and deepening this partnership over the years to come.” Karen White, Chief Executive Officer of RMS, said: “Tokio Marine has been a global market leader and valued partner to RMS throughout our longstanding relationship. The global risk market is growing more complex and inter-connected. As we together tackle existing as well as increasing risks such as climate change and extreme weather events, systemic risks, clash risks, cyber, pandemic and infectious disease risks and other perils, meaningful collaboration and partnerships, coupled with leading edge science and technology, are vital. We look forward to continuing our work with Tokio to ensure the deepest insights and views of risks, to optimize business outcomes and greater global resiliency.”

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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