Risk Management Solutions announced the launch of its first probabilistic model to enhance the way account underwriters quantify and manage exposure to fire risk. Aimed at primary commercial and specialty insurers and reinsurers, the RMS Account Fire Model provides a link between engineering best practices and the account underwriting process and supplies comprehensive data at the account level.

"Traditionally, fire risk underwriting has been based on limited exposure data and subjective analysis," says Craig Van Anne, vice president at RMS. "As a decision-making tool to support the commercial underwriting process, the Account Fire Model brings consistency and transparency to the process of calculating fire premiums and selecting risks. By having comprehensive data on the properties within an account, underwriters can be more confident about assessing the profitability of the business they take on."

Fire represents approximately 60 percent to 70 percent of the "all risk" premium paid to an insurer for a typical property account. By helping to improve risk selection and pricing, the Account Fire Model can deliver substantial gains to the bottom line.

To assess the risk, the model simulates the behavior of a fire as it spreads through a building's open doors and breached firewalls and actively demonstrates the effect of sprinkler systems in helping to contain damage. The impact of fire department activity is then modeled by simulating response and control times based on actual U.S. fire incident statistics.