Velocity HoldCo, the parent company for Velocity Risk Underwriters, announced a joint venture with Louisiana State University (LSU) on a Gulf Coast-central hurricane model.
The model uses daily data to predict US hurricane seasonal activity, representing a significant advancement in more precise Gulf hurricane forecasting.
Velocity Risk, an Excess and Surplus general agency, is an active participant in the E&S property catastrophe market, with US hurricane risk being not only the most consequential factor for its business but for the industry at large.
The collaboration between Velocity Risk and LSU began in early 2023, with the project officially starting in the summer of 2023. The joint venture was driven by a team of experts, including Dr. Paul W. Miller, Assistant Professor, Department of Oceanography and Coastal Sciences, LSU; Henry Lipscomb, Analytics Manager and Sam Ye, Data Scientist of Velocity Risk; and Jonathan Russell, Velocity Risk Intern and LSU student.
Inspired by Dr. Paul Miller’s original Gulf Coast model, the Velocity Risk LSU Gulf Hurricane Outlook leverages comprehensive daily data aggregated into whole season forecasts. It employs a sophisticated Random Forest machine learning algorithm for this model, allowing the team to make daily predictions, normalizing these figures to produce an accurate forecast for the upcoming season.
The Velocity Risk-LSU model calls for 12 systems in the Gulf of Mexico for the 2024 US hurricane season.The yearly release of this new model will provide valuable insights for the Gulf Coast and can augment Velocity Risk’s portfolio construction and risk management strategies.
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