The fire that ripped through the Monte Carlo Hotel and Casino onJanuary 25 could have been a lot worse in terms of the amount ofthe resulting insured loss. An expert analysis from internationalcatastrophe risk services provider, Risk Management Solutions,reported that the fire could have caused more damage had it startedin a different place in the building and not contained as fast asit was.

According to RMS, This incident is one of many of possible firescenarios; examining the risk of a fire starting in a guest roomrather than the roof in a hotel of similar size and layout to theMonte Carlo when fire sprinkler systems do not function properly,illustrates how losses could have reached $75 million.

“Situations like this are a vivid reminder of the potential forlow-probability, large-loss events within the realm of fire riskunderwriting,” said Mark Rascio , product manager for the RMS firemodel in a release. Rascio also mentioned that tourist spots likethe Monte Carlo are vulnerable to steep business interruption costsin addition to building and content losses.

RMS will soon be launching its new account fire model that willprovide metrics for risk managers.

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