RMS Hurricane Model Gains Recertification from Fla. Commission

Risk Management Solutions (RMS) announced that the Florida Commission on Hurricane Loss Projection Methodology (FCHLPM) re-certified the RMS Hurricane model for use in establishing residential insurance rates in the state of Florida.

This year’s review included upgrades to the RMS model that reflect new research on vulnerability of manufactured homes, allowing for better differentiation of this class of risk based on year built. RMS is a provider of products and services for the management of catastrophe risks, and its U.S. Hurricane model is used by primary insurers, reinsurers, intermediaries, and other financial institutions to develop strategies for pricing, portfolio management, and risk transfer.

“Prior to last year’s active hurricane season, there was only a limited amount of empirical data available regarding the performance of manufactured homes based on year of construction; therefore, differentiation by year built was based primarily on expert opinion,” said Michael Young, chief wind engineer at RMS. “However, the resolution and detail of 2004 claims and exposure data regarding manufactured homes have demonstrated notable differences in damage based upon various eras of construction, providing sufficient evidence to update this aspect of our vulnerability model.”

To be certified by the Commission, RMS submits extensive documentation supporting the model’s accuracy, and is then audited by an independent panel of experts.

The RMS model passed all 35 standards set forth by the Commission in its most recent Report of Activities, covering meteorology, vulnerability, actuarial, statistics, computing and other general standards that apply to models used for developing residential insurance loss costs in Florida.

Topics Florida Catastrophe Natural Disasters Hurricane