Version 18: Capitalize on Asia Pacific

2018 will see RMS® release a slew of new Version 18 models covering new countries and perils for the Asia Pacific region, as well as updates to incorporate the latest science into existing models.

For Australia, where tropical cyclones are responsible for over a quarter of insured natural catastrophe losses and several in the last decade each caused more than US$500 million in loss, the RMS Australia Cyclone Model provides the most up-to-date view of cyclone wind risk in the region.

Updates to the RMS Australia Earthquake Model together with the recent release of the RMS New Zealand Earthquake HD Model both benefit from lessons learned after the 2010–2011 Canterbury Earthquake Sequence.

Flooding in India causes three-quarters of all natural catastrophe losses, and RMS India Inland Flood Model and Data Products help (re)insurers safely expand their business in this fast-growing market using a comprehensive flood solution, including a state-of-the-art probabilistic model and an accompanying suite of underwriting data products.

Also, read more on the RMS India Earthquake Model and access RMS Owl for an executive briefing on the upcoming RMS Philippines Typhoon Model.

Contact your RMS account executive for more information on the availability of Version 18 models.

No Fear With RMS(one)

Should (re)insurers be scared about 2018? Last year saw more than twice the amount of malicious hacking activity that 2016 did. And insurers could be more exposed than most as many businesses rely on a patchwork of homegrown systems, leaving them extremely vulnerable to exploits. Already in 2018, an industry-wide vulnerability has been discovered (Spectre and Meltdown) that affects central processing units (CPUs) from manufacturers such as Intel, AMD and ARM, which could allow hackers to steal sensitive data without the user’s knowledge.

Find out why clients using the RMS(one)® platform have no reason to worry about security and resiliency in these two new white papers, Security on RMS(one) Solutions and RMS(one) Solutions: Architected for High Availability and Resiliency. The RMS(one) platform is architected for security, availability, and compliance from the ground up, and RMS(one) developers have baked application security throughout the software development lifecycle. Most applications would stop there, but the RMS(one) solutions security team took it to the next level with advanced and hardened firewalls, intrusion detection, and ongoing log monitoring and analysis to secure the entire perimeter.

The RMS(one) platform complies with the most accepted industry standards and regulations, including ISO 27001 and SOC 2 for security, availability, and confidentiality, and upcoming standards such as the General Data Protection Regulation (GDPR) in Europe. Our partnership with Microsoft Azure, the industry leader in cloud services, and our focus on business continuity and disaster recovery ensure that RMS(one) works seamlessly 24/7/365, just as our clients do.

Learn more about RMS(one) security and compliance through our new RMS(one) platform page:

Turning Big Data Into Big Decisions

What is the next phase of big data? (Re)insurers that are moving ahead with big data are not only mastering the storage of huge volumes of data, but are now starting to generate insight on demand and feed this insight into their decision-making processes to make informed business choices.

Farhana Alarakhiya, vice president of product marketing and enablement at RMS, and Jonathan Silverman, director of worldwide insurance industry solutions at Microsoft, discussed the impact that big data is having on the industry in an A.M. Best TV video The Next Phase of Big Data: Info That Analyzes Itself, Presents Choices, filmed at the PCI Meeting in Chicago.

Avoiding a scenario of being "data rich, insight poor," Farhana describes how (re)insurers are harnessing rich flows of data they already have and, within microseconds, capturing and transforming data into insights to use on the business frontline. Both interviewees also outline the upcoming General Data Protection Regulation (GDPR) in Europe and discuss its implications for (re)insurers.

Looking Ahead: Nationwide Selects RMS Longevity Model

From lifestyle trends to regenerative medicine, many factors are in play with regards to longevity risk. Leading U.S. insurer Nationwide has licensed the RMS® Longevity Model to manage risks associated with changing lifespans in the American population more actively across the company's portfolio of annuity and life protection plans. Nationwide selected the model because their risk management team believes it provides a conceptually sound, forward-looking view of the key factors that will drive longevity into the future, including potential medical breakthroughs that could have significant impacts on life expectancy.

Steve Ginnan, chief actuary at Nationwide Financial, commented: "As we look to expand our offering in terms of lifetime income guarantees, we recognize the need to consider all possible changes in life expectancy trends. This is an essential part of our risk management of future liabilities, just as we must consider the full range of equity and interest rate scenarios. RMS gives us the analytics to benefit from these deeper longevity risk insights."

Read the full announcement in the RMS Press Room.

How to Build a House in Nepal

When you think about status symbols, a house resistant to earthquake shocks may not be the first item that springs to mind. But for the citizens of Nepal, it's something everyone wants. An Mw7.8 earthquake on April 25, 2015, that struck the mountainous Gorkha District of central Nepal caused nearly 9,000 fatalities, destroyed more than 600,000 buildings, and affected the lives of 8 million people in a country with a total population of 26.5 million. With this level of devastation, and a momentous task ahead to urgently rebuild, what could be done to build homes that will be more resilient to future earthquakes?

Alastair Norris, a senior consultant based at RMS in London, first visited Nepal as part of the RMS Impact Trek team in November 2016. RMS employees and RMS clients worked together with Build Change, a charity helping to build disaster-resistant structures to greatly reduce deaths, injuries, and economic losses from disasters. Watch this video to find out more about what the Impact Trek team discovered about Build Change's work in Nepal.

After the trek, Alastair was so fascinated by the work that Build Change was doing that he returned to Nepal for a four-month sabbatical. Alastair details his experiences in two new RMS blogs. There is tangible evidence that seismic-resistant building design and construction methods, together with funding and increasing skill levels among construction workers, is beginning to pay dividends in Nepal.

Can't Wait Until June: The Likelihood of Off-Season Hurricanes

With the official end of the 2017 North Atlantic hurricane season last November 30, and the official start of the 2018 season due on June 1, the hurricane "off-season" hopefully provides welcome respite. But hurricanes do happen in the off-season, and in a RMS blog James Cosgrove, event response analyst at RMS, examines the remaining three percent of tropical storm activity that occurs between the start of December and the end of May.

James explores whether to be concerned about December's sea surface temperatures in the western tropical Atlantic and Caribbean Sea remaining anomalously warm at 26.5 to 28.5 degrees Celsius, which is warm enough to support a tropical system should one develop. He also discusses what other factors come into focus when looking at off-season storms and asks the question whether a busy 2017 will mean an early start to the hurricane season in 2018.

Why It's Good to Ask "What If…?"

The WannaCry ransomware attack launched on May 12, 2017, infected approximately 0.1 percent of the roughly 400 million actively used Windows 7 computers around the globe. That's bad enough, but if the WannaCry ransomware had been launched before the release of a Microsoft security patch on March 14, 2017, millions more computers would have been infected.

On July 7, 2017, disaster was narrowly averted when Air Canada flight 759, an Airbus A320 with 135 passengers on board, attempted to land on a full taxiway at San Francisco Airport with four other planes. It pulled up just in time, but five seconds longer and it might have crashed into fully loaded planes and killed over 500 people, resulting in potentially the deadliest aviation disaster ever.

RMS and Lloyd's have worked together to produce a report entitled Reimagining History: Counterfactual Risk Analysis. Whenever an event occurs that takes the insurance market by surprise, questions are asked how the loss might have been averted or reduced, but the report argues that it is also useful for insurers and other interested parties to ask how the loss might have been worse.

This approach, known as downward counterfactual analysis, aims to encourage insurers to think about risk in a different way by highlighting counterfactual analysis' potential to mitigate data bias, test model results, analyze tail risk, and identify potential high-impact events. The report also details how counterfactual analysis can be carried out in practice and acts as a starting point for future research.

Join RMS at Global Industry Events

Join RMS thought leaders from across the business who are participating in industry events during the next couple of months:

RAA Cat Risk Management 2018
February 13–15, 2018, Loew's Portofino Bay Hotel, Orlando, Florida

RMS is sponsoring the Reinsurance Association of America (RAA) Cat Risk Management 2018 Conference, which will focus on scientific and theoretical developments that will challenge your current thinking. The industry is faced with choices of models, and then additional options within each model. How will these choices impact how we manage volatile risk in our portfolios? Robert Muir-Wood, chief research officer at RMS, will participate in a panel discussion on Thursday, February 15, entitled 2018 Model Comparison - U.S. Earthquake

Fifth Annual CAT Risk Management and Modeling Europe 2018
March 7–8, 2018, 200 Aldersgate, London

At the largest independent global cat risk conference series in Europe, speakers will reflect on the devastating impact of natural catastrophes during 2017. How will the increased likelihood, severity, and complexity of such perils translate into critical action for the (re)insurance industry to keep up with market demand and anticipate future changes through the advancement of modeling technology. Tom Sabbatelli, senior product manager at RMS, will be a speaker at the conference.

Go to for a full list of events, tradeshows and conferences, and speaking engagements.