RMS has announced the release of the RMS U.S. Wildfire High-Definition (HD) Model, offering the most comprehensive solution available for addressing wildfire risk across the United States. Since 2014, devastating wildfires have unleashed US$30 billion in claims and during last year’s 2018 wildfire season, the Camp and Woolsey wildfires alone are estimated to cost between US$9 billion to US$13 billion in insured losses.
As wildfires have become more prevalent, these recent seasons have demonstrated the critical need for more advanced tools, analytics and a broader regional footprint to be incorporated in today’s risk model solutions. The RMS U.S. Wildfire HD Model captures the full impact of wildfire at high resolution to enable a more explicit understanding of embers, smoke and the complex behavior of wildfire. Simulating over 18 million wildfires across the contiguous U.S., the United States Wildfire HD Model enables users to have more granular and comprehensive approach to underwriting and portfolio management.
RMS looks forward to welcoming delegates to the seventh Exceedance conference on May 13–16. This much-anticipated event returns for the second year to the InterContinental Miami – a four-star luxury resort hotel conveniently located on the Biscayne Bay waterfront in the heart of downtown’s thriving financial and business district. Whether you have joined us before or if this will be your first time at the event, Exceedance is where RMS experts, industry thought leaders, and colleagues learn how the latest RMS enterprise solutions, new science, and data-driven approaches will help improve your business efficiency, and effectiveness.
Keep an eye on the new-look Exceedance website as keynote speakers and session details are announced during the run-up to the event. And as previous delegates will know, Exceedance offers a range of pre-conference activities, and social events, culminating in the Exceedance Party. If you need more information on reasons to attend, click here to access a Justify Your Attendance letter.
Reserve your place now, and until February 16 claim an Early Bird Registration discount rate and save 15 percent of the full registration price. Group discounts for organizations bringing five or more delegates, special rates for government and IT employees, plus alumni rates are also available.
From Hurricanes’ Florence and Michael, wildfires in California, Typhoon Jebi and Mangkhut, severe floods in India and Japan, through to earthquakes and tsunamis in Indonesia, 2018 proved to be yet another very active year for natural catastrophes. In a new review report, the RMS Event Response team look back and provide some context.
The report provides meteorological reviews for a year that saw significant cyclonic activity in the North Atlantic, Eastern Pacific and Western Pacific basins, and analyzes recorded activity verses pre-season forecasts. The review also uses event commentary and thought-leadership articles to deliver analysis behind some of the key drivers of these events. Focus topics include another record-breaking year for California wildfire from the Carr Fire in July through to Woolsey in December, and for Indonesia which experienced two localized tsunamis in the space of three months. RMS clients can access RMS OWL here to download the report.
There was cause for some celebration with regards to the development of the private U.S. flood insurance market during 2018, which the market can capitalize on during 2019, according to a new blog from Emily Grover-Kopec, Vice President and Head of Modeling Solutions at RMS, entitled “U.S. Flood Insurance: Top Five Things You Should Know From 2018.”
Emily states that changes made by FEMA to the National Flood Insurance Program (NFIP) have made it easier for private carriers operating within the “Write Your Own” program to sell private policies, and also easier for policyholders, who can now cancel an NFIP policy mid-term to switch to a private policy. Although Congress struggles to grapple with the long-term plan for the NFIP, and private market penetration is low, new risk models such as the RMS U.S. Inland Flood HD model are helping private carriers to overcome barriers and gain traction. Explore a dedicated U.S. Inland Flood microsite here.
In terms of NFIP reform, Emily has also written an article in Reactions magazine. Looking at Hurricane Florence in September 2018 – a stalled, rainfall driven hurricane, Emily argues that the NFIP is not serving these inland communities that were most affected by flood. Take-up rates for NFIP policies is less than two percent in the inland counties of North Carolina and South Carolina. Scientists at the National Center for Atmospheric Research (NCAR) also point to increasing temperatures slowing the speed of tropical cyclones and pumping more moisture into those storms, resulting in more tropical cyclone-driven rainfall and resulting flooding.
Emily states that reforms are needed to create an NFIP that can support effective recovery for homeowners and build resiliency to events like Hurricane Florence over the long-term. Click here to read the full article in Reactions magazine.
Andrew Coburn and Gordon Woo from RMS, together with Éireann Leverett from the University of Cambridge Centre for Risk Studies, have published a new book entitled “Solving Cyber Risk” – the first book on cyber risk written by authors with extensive experience and expertise in modeling catastrophe insurance risk of all kinds.
The authors examine the need for a multi-peril perspective – which proves indispensable for gauging the relative importance of different risks. With cyber risk being a man-made peril, it also has a number of common features with terrorism, which has been modeled by RMS since 9/11, and this overlap area of cyber terrorism is just one of the important topics addressed in this book. The authors argue that as with terrorism security, the most effective cyber security investments are not always what people think they are.
Click here to download a free excerpt from the book; a chapter entitled Anatomy of a Data Exfiltration Attack, which illustrates the origins and the mechanics of an attack, as well as its impact. By examining the Target cyberattack in 2013, the authors tell the story of the Rescator cyber-hacker team – the perpetrators of a data-theft involving 110 million payment card details from Target customers. The authors held a book launch in London on January 21; click here to register for the New York launch on February 26. For more on RMS cyber solutions, click here.
When does it make sense to consider relocating a city that faces severe hazards? In a recent blog, Robert Muir-Wood, chief research officer for RMS, reflects on a recent visit to Wellington, the capital city of New Zealand, which is still rebuilding from the 2016 Kaikoura earthquake. Looking back at the creation of the city in the nineteenth century, it was hit by two large earthquakes in 1848 and 1855 – within the space of seven years. If the city planners had known in 1865 – when Wellington was designated as the capital, about the hazards we know today – that the city lies in a nest of faults that absorb components of the Australia-Pacific plate boundary, perhaps the city would not have been capitalized.
And with thousands of government offices and Parliament itself located in Wellington, Robert states that ultimately the choice of where a government locates its capital relative to the landscape of hazards becomes not just an economic question but an ethical issue, with thousands of public employees at risk. He argues that perhaps the most effective way of managing this risk long-term is not to buy more insurance or improve the compliance of building codes (both of which are valid short-term measures), but to relocate the capital somewhere with a low catastrophe risk profile. Click here to read Robert’s blog.
RMS recently announced the appointment Cihan Biyikoglu as Executive Vice President of Product, reporting to Chief Executive Officer Karen White and serving as a member of the company’s executive committee. In his new role, Biyikoglu will oversee management of the full suite of RMS catastrophe risk models and risk management solutions.
Biyikoglu joins RMS with nearly 20 years’ experience of product management leadership at Fortune 500 technology companies. He will draw on his extensive knowledge around bringing innovative customer-centric technologies to market as he focuses on RMS risk management products.
His most recent roles included Vice President of Product Management at Databricks and Redis Labs, where he was responsible the architectural direction and product strategy for cloud services and on-premise infrastructure. Prior to Databricks and Redis Labs, Biyikoglu worked at Couchbase and Twitter. For nearly a decade, he served as a technical product management lead for Microsoft’s Azure Platform, Azure SQL, and SQL Server.
Karen White, Chief Executive Officer at RMS said, “Cihan is one of the most highly regarded product executives in the technology industry. As a deeply technical and innovative thinker, Cihan brings a depth of experience and understanding around building customer-centric tools focused on scalability, efficiency, and high performance. As our market evolves and demands more data-driven solutions, Cihan’s knowledge and skill will ensure we continue to meet and exceed our client’s expectations.” Read more in the full announcement in the RMS Newsroom.
In late November last year, the U.S. Government released the final part of its Fourth National Climate Assessment also known as NCA4. Produced in two volumes. Climate Science Special Report (NCA4 Vol. I) was released in 2017, and Climate Change Impacts, Risks, and Adaptation in the U.S. (NCA4 Vol. II), was released on November 23, 2018.
In two blogs, Pete Dailey, Vice President, Model Product Management for RMS, uses the findings from NCA4 as a background to help illustrate the fundamentals of climate science. He first looks to establish a baseline of understanding around weather, climate, and climate change, to help move the debate from the basics. He investigates how climate change and climate science has been communicated over the last 40 years or so and stresses the importance of clarifying scientific fact from speculation to make informed decisions in the face of scientific uncertainty. He also asks the question “Does climate change exist?” recognizing that nearly every reputable climate scientist worldwide states the global climate is currently warming, and weather is becoming more extreme.
In his second blog, Pete looks at attribution – the portion of rising temperatures attributable to human activity via the burning of fossil fuels and release of greenhouse gases (GHGs). Today’s climate models can reconstruct historical temperature records, and then replay history “as if” GHGs had not been released. The difference between these simulated climates provides a means of quantifying the warming that stems directly from the emissions. And for extreme event attribution, it attempts to quantify the responsibility of climate change for a single weather event.
Although as in many aspects of climate science, the conclusions are not definitive, Pete states that attribution can help us better understand how climate change may be affecting our daily lives and focus the conversation on real-life impacts that require important decisions in the face of uncertainty.
Click on these links to read Pete’s first blog entitled Climate Change and NCA4: Part One and his second blog Climate Change and NCA4 Part Two: Attribution and Future Climate Change.
The Reinsurance Association of America (RAA) Catastrophe Risk Management 2019 conference entitled The Future of Catastrophe Management - 2020 and Beyond will be held at the Loews Portofino Bay Hotel, Orlando, Florida, on February 25-28. This year’s conference will examine the rapidly changing landscape of cat risk management, focusing on how new tools will be used in conjunction with existing tools to transform the process of risk evaluation.
RMS is a conference sponsor and will be presenting two sessions. On Wednesday, February 27, Pete Dailey, Vice President at RMS, will be presenting a session entitled Using Catastrophe Models in a Changing Climate. In this session, Pete will look at how catastrophe modeling is leveraging climate change science to improve decision making in risk management. He also asks how can models that measure today’s risk be used to estimate future risk.
Also on Wednesday, Robert Muir-Wood, Chief Research Officer at RMS, presents a session entitled Modeling Innovations and Risk Insight. Robert will explore how research-driven innovations improve our understanding and representation of catastrophe risk. The talk will cover situations where small variations in inputs can make big differences in the quantification of the risk.
The New Zealand Earthquake Commission (EQC) is supported by an Act of Parliament which sees the Crown as the insurer of first resort for earthquakes in New Zealand. The EQC provides the first layer of earthquake coverage for a remarkable 98 percent of the 1.84 million residential properties across the country, with the private market delivering cover over this initial layer.
But a new proposed Earthquake Commission Amendment Bill would see changes around the coverage layers provided by the EQC – to be introduced as early as July 1, 2019. In a new blog from Michael Drayton and Ashley Bernero, they argue that this will lead to major changes in the private market’s gross losses above these EQC layers, with the current EQC layers representing a sizeable deductible. The EQC changes will see an increase from NZ$100,000 to NZ$150,000 for buildings, and a decrease from NZ$20,000 to zero for contents.
To help the market understand the likely effects of the changes to EQC, RMS used both the updated New Zealand IED and Earthquake Industry Loss Curves (ILCs), trended exposures to represent 2018 values, and then applied the proposed EQC financial structures. Read the blog to see the potential changes in ground-up annual average loss (AAL).