Editor's note: Hemant Shah is CEO and president of catastrophe modeler Risk Management Solutions.

Superstorm Sandy was an extraordinary weather event, particularly given the destruction produced by its large storm surge in relation to the wind damage. Two weeks following the event, RMS issued its first and only estimate: insured losses would fall between $20 billion and $25 billion. So what goes into producing loss estimates and what have we learned about the art of post-event loss estimation from previous events?

Balancing the need for reliability with timeliness, we issued our loss estimate two weeks after Sandy made landfall. Our policy, based on extensive client consultation and a number of years of hard-earned experience, has revealed there is little benefit in rushing to publish and publicize an industry-loss estimate. It can be unhelpful if clients are forced to react to a modeler's estimate before we are even able to support their own internal estimations.

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