Risk Management Solutions has withdrawn a short-term, five-year hurricane forecasting model submitted for approval to Florida officials after being told the model did not meet required standards.
Mitch Sattler, RMS vice president, said representatives of the Florida Commission on Hurricane Loss Projection Methodology concluded that the short term model did not meet its standards.
FCHLPM member Howard Eagelfeld said the team “had uncertainties” with regard to the meteorologists on the RMS panel.
RMS could request a second review but opted not to proceed with the short-term model and will stick with its more traditional long-term version.
Models have historically been based on over a hundred years of historical data, but last year RMS developed a forecast of only five years because hurricane activity over the next few years will be above the historical average.
Consumer groups have criticized the five-year models and urged states to block them. Georgia and now Florida have done so.
The decision to withdraw its short-term model is a result of Florida continuing to engage in “wholesale denial over hurricanes” in general, according to Robert Hartwig, of the industry’s Insurance Information Institute. “There are numerous models out there but no model would bring actuarial justification to the current environment in Florida.”
The $2.7 million Florida Public Hurricane Model has also not been certified. “The FIU model shows losses higher than all the other models out there,” according to Sattler.
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