logo image

NEWARK, CA – November 4, 2020RMS®, the world’s leading catastrophe risk solutions company, estimates total onshore U.S. insured losses from Hurricane Zeta to be between US$3 and US$5 bn. The estimate includes losses to the National Flood Insurance Program (NFIP) of between US$200m and US$300m.

U.S. insured loss estimates for Hurricane Zeta (US$ bn):

Wind + Surge NFIP Total
2.8 - 4.7 0.2 -0.3 3.0 - 5.0

This estimate includes wind and storm surge losses across the impacted states, including Louisiana and Mississippi, based on analysis of RMS ensemble footprints in Version 18.1 of the RMS North Atlantic Hurricane Model. RMS ensemble footprints are reconstructions of Zeta’s hazards that capture the uncertainties surrounding observed winds and storm surge. Losses associated with inland flooding are expected to be negligible, due to Zeta’s fast forward speed post-landfall, which kept high rainfall totals to isolated areas.

The RMS estimate includes a 5% reduction in insured onshore losses due to the cumulative impacts of Hurricane Sally, which damaged some of the same region earlier this season.

“We do expect some overlap between Zeta and Sally as the industry settles losses from these two events, but not to the degree of Delta and Laura a few weeks ago. Our Development Team found that approximately 20% of zip codes impacted by Zeta were also impacted by Sally, particularly at lower wind speeds. The overlap in the worst-affected areas of these two storms appears to be minimal. Thus, we expect a smaller loss reduction factor compared to the Delta and Laura events, largely attributed to structures in the overlapping region that sustained some, but not total damage from Sally, followed by additional damage from Zeta,” 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.

“Power outages and treefall-driven impacts were two key factors in Zeta. The storm’s fast forward speed brought damaging winds well inland, particularly in areas with an abundance of trees, including metro Atlanta. This, combined with already saturated soil conditions, led to one of the most significant power outages of the season. Some fallen trees also directly damaged buildings and vehicles. We expect these factors to amplify insured losses.” said Rajkiran Vojjala, Vice President, Model Development. 

The estimate also includes losses to the NFIP in the range of US$200 million to US$300 million. NFIP losses were derived using the RMS view of NFIP exposure based on 2019 policy-in-force data published by the Federal Emergency Management Agency (FEMA), and the Version 18.1 North Atlantic Hurricane Models.

In Mexico, RMS estimates insured losses from Zeta to be minimal. However, consistent with previous impactful tropical cyclone events this season, overall insured losses constitute a fraction of the total economic losses, particularly in Mexico which has significantly lower rates of insurance take-up compared to the U.S.

Additionally, RMS estimates insured losses to offshore platforms, rigs, and pipelines in the Gulf of Mexico to not exceed US$500m from wind and wave-driven damages. While platforms in the Central Gulf of Mexico are built with higher deck heights to negotiate wave hazard, Zeta exposed a significant number of state lease platforms to high winds and waves along the Louisiana coast. Offshore losses are based on the October 2020 vintage of the RMS Offshore Platform Industry Exposure Database.

Zeta made landfall near Cocodrie, Louisiana on Wednesday, October 28, 2020 as a Category 2 hurricane on the Saffir-Simpson Hurricane Wind Scale. At landfall, Zeta produced sustained winds of 110 mph (177 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. Consistent with several previous events this season, the landfall location and timing were well forecast by the HWind forecasting products more than 72 hours before landfall.

“Despite encountering cooler waters and strong wind shear in its approach, Zeta managed to intensify before making landfall in Louisiana, nearly achieving major hurricane status. The storm’s fast forward motion–common for events that occur later in the season–reduced material water-driven impacts along the Gulf coast. However, that rapid movement brought hurricane-force winds well inland before Zeta finally weakened. In this unprecedented 2020 season, Zeta is another reminder that the season is far from over,” said Pete Dailey, Vice President, Model Development.

Hurricane Zeta was the twenty-seventh named storm of the 2020 North Atlantic hurricane season, the eleventh hurricane, and the sixth U.S. landfalling hurricane of this extremely active season. Zeta was the eleventh named storm to make landfall in the contiguous U.S. so far in 2020, and a record-breaking fifth named storm of 2020 to make landfall in Louisiana. One month remains in the Atlantic hurricane season, ending officially 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.  

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.

Related Resources
August 26, 2022
AXA Climate to Use RMS HWind as a Trigger Metric for Parametric Insurance Policies

LONDON – 26 August, 2022 – AXA Climate, an entity of the AXA Group specializing in climate change adaptation, will include HWind analytics from RMS®, a Moody’s Analytics company and world-leading risk modeling and solutions company, as a trigger metric for its relevant parametric insurance policies. HWind produces real-time data sets for tropical cyclone events, allowing quick evaluation of hurricane trigger/payout conditions, which enables parametric policyholders to gain rapid access to capital following impactful events. RMS HWind solutions offer comprehensive coverage over the Western North Atlantic, Eastern Pacific, and Central Pacific basins. Using RMS HWind helps AXA Climate to be fully flexible as to how and where they structure parametric policies, allowing AXA Climate to reassure their clients that they will quickly receive the protection they paid for when damaging winds are present. Amaury Dufetel, Head of Insurance, AXA Climate, said: “As an Engaged Climate Insurer, we believe the preciseness of sophisticated real-time data is essential to improve the use and uptake of parametric insurance solutions. Data coming from independent reputable organizations like RMS HWind solutions, developed over more than 25 years by one of the world’s leading hurricane observation researchers, will allow us to structure innovative parametric covers and bring to our clients the best tailormade Tropical Cyclone coverage both in terms of price and claim settlement.” Charlotte Acton, Senior Director, RMS, added: “By working closely with AXA Climate, we have been able to help an important client develop innovative products that offer a competitive advantage and can help enable growth into new markets. Parametric insurance is another example of how the insurance industry can help build resilience into economies, which in turn helps reduce the protection gap. RMS remains committed to supporting insurance innovation, in our products, for our clients, and for their end users.”       About AXA Climate AXA Climate is a Committed Climate Insurer: We integrate best-in-class climate expertise and data in all our products. We believe that from this decade onwards, only private and public actors committed to a sustainable transition will be insurable.   Our mission is to reinvent the insurance business to support those engaged in sustainable transitions. We have developed a set of business lines around climate change: parametric insurance against climate risks, climate and nature consulting services, financing and climate training to engage all employees.   We are a team of over 150 collaborators spread across the 5 continents, leveraging the entire AXA ecosystem. Visit https://www.climate.axa/ to learn more and follow us on LinkedIn.

Read More
August 15, 2022
Moody’s Analytics and RMS Appoint Asia-Pacific Managing Director to Lead Customer Experience and Business Development

NEWARK, CA – 15 August, 2022 – Andrew Hare has been appointed Managing Director, Asia-Pacific at RMS®, a Moody's Analytics company and global leader in risk modeling and solutions. Andrew will be responsible for integrating and leading the strategy and execution across the combined RMS and Moody’s Analytics Insurance Vertical, as well as overseeing client relationships and business development in the region. He will be based in Singapore and will report to Michael Steel, General Manager at RMS, and Wael Jadallah, Moody’s Analytics Head of APAC and the Middle East. Andrew has almost 25 years of experience and was most recently Managing Director and Head of Aon Inpoint (Aon's insurance advisory business) for Asia. He was previously a Managing Director responsible for Strategy and Growth at Aon Reinsurance Solutions across Asia-Pacific. During his 17-year career with Aon, Andrew worked extensively with insurers and reinsurers in the U.K., Europe, Bermuda, and North America before moving to Singapore in 2013. Andrew began his career with Accenture after majoring in Business Management at Oxford Brookes University. Michael Steel, General Manager, RMS said: "Andrew brings extensive experience in the insurance industry, as well as a thorough understanding of the diverse risk requirements in Asia-Pacific, where he has built industry-leading teams and capabilities that have delivered deep insights and added value to insurers and reinsurers. We are delighted to welcome Andrew and look forward to the positive impact he will have on RMS and Moody's Analytics clients. We have always placed a high value on the Asia-Pacific region, and Andrew's appointment demonstrates our continued commitment to providing leading insight, data, and analytics to our clients, communities, and the industry." Wael Jadallah, General Manager Asia-Pacific and the Middle East, Moody's Analytics, highlighted: “We are delighted to have Andrew join as Managing Director and head of our Insurance practice in Asia-Pacific and the Middle East. Andrew is well known and respected by an extensive network within the insurance industry globally. He brings a wealth of experience and his appointment is a testimony of Moody’s Analytics’ investment in our regions, as we continue to invest in our commitment to add value to our clients’ evolving needs.” Andrew Hare, Managing Director, Asia-Pacific, RMS added: “Climate change and natural catastrophes, such as flood, fire, earthquake, and typhoon, continue to wreak havoc on the Asia-Pacific region. Following the devastating effects of the COVID-19 outbreak as well as chronic supply chain disruptions, heightened cyberattacks, social and economic inflation, and global geopolitical uncertainty, many economies and communities in the region are continuing their long road to recovery. RMS, with the combination of capabilities with Moody’s Analytics, is uniquely positioned to provide a deep understanding of the region’s evolving risk profile and increase confidence in risk management and selection. I am thrilled to join the team to deliver an integrated risk assessment strategy that will help clients and communities decode risk and unlock opportunity."

Read More
August 03, 2022
Covenant Underwriters Use RMS Analytics to Offer Clients Real-Time Premium Figures During Quote Process

LONDON – 3 August, 2022 – Covenant Underwriters, the e-commerce insurance program administrator, is using Location Intelligence API from RMS®, a Moody’s Analytics company and world-leading risk modeling and solutions company, to provide real-time premium indications to its clients during the quotation process. RMS Location Intelligence API offers market-leading, high-resolution, location-level hazard, risk, and loss metrics delivered directly into underwriting workflows. Clients using Location Intelligence API benefit from trusted model data to help customize pricing for each policy, helping avoid adverse selection and to provide greater opportunities for dynamic pricing. Location Intelligence API is available in multiple countries and covers key modeled perils like hurricane, flood, earthquake, wildfire, convective storm, and more. Daniel Murray, Chief Underwriter at Covenant Underwriters, said: “Covenant has developed an API-powered rating algorithm that leverages big data and artificial intelligence to produce an instant price indication for any given address. Using an application programming interface (API) to integrate RMS knowledge and insight directly into the Covenant platform, enables our retail brokers to craft the winning terms during the quote process.” Marisa Ruscitto, Managing Director, RMS, said: “The RMS Location Intelligence API enables users to benefit from a competitive advantage with real-time, location-level hazard, risk, and loss metrics. Using these metrics not only helps with risk selection but also pricing, screening, and referrals. As underwriting workflows automate rapidly, an increasing number of industry leaders are adopting real-time underwriting processes and decision-making capability to quickly match risk to capital, and to better support their clients and their business.” About Covenant Underwriters Based in Houston, Texas, Covenant Underwriters develops and administers e-commerce insurance programs that leverage custom forms, cutting-edge technology, and niche underwriting to make specialty insurance easy for retail brokers.  Current niche programs include commercial package policies for limited-service hotels and convenience stores with gas stations. Visit Covenant Underwriters for more information.

Read More
About RMS

Risk Management Solutions, Inc. (RMS) a Moody's Analytics company, 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 the RMS Intelligent Risk Platform™, the only open cloud with collaborative applications and unified analytics that can power risk management excellence across organizations and industries. 

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 and flexible 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.

RMS is a subsidiary of Moody’s Corporation (NYSE: MCO) and operates as part of the Moody’s Analytics business segment. Moody’s Analytics is operationally and legally separate from the Moody’s Investors Service credit rating agency.

Media Contacts

Matthew Longbottom

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

Haggie Partners

PR Lead, Americas
cta image

Subscribe to Our Newsletter

close button
Overlay Image
Video Title

Thank You

You’ll be contacted by an RMS specialist shortly.