RMS Hurricane Model Gets Seal Of Approval
NU Online News Service, May13, 3:26 p.m. EDT?Risk Management Solutions said its hurricane model used for setting Florida home insurance rates has been recertified as meeting the tougher criteria of the Florida Commission on Hurricane Loss Projection Methodology.[@@]
RMS, based in Newark, Calif., provides products and services for the management of catastrophe risks. The firm said its U.S. Hurricane model is used by primary insurers, reinsurers, intermediaries and other financial institutions to develop strategies for pricing, portfolio management and risk transfer.
RMS said this is the seventh consecutive year that the commission has certified its model.
To secure certification, a company must provide extensive documentation supporting the hurricane model's accuracy and be audited by an independent panel of experts. RMS said its model passed all 34 standards set forth by the FCHLPM.
Examination of the model covers aspects of vulnerability, validation, computing, statistics and the actuarial use of modeled loss costs. According to RMS, commission standards were expanded from previous years to include a more in-depth evaluation of all of the model's technical components.
The company said the RMS* U.S. Hurricane Model was first released in 1993 and has undergone two major upgrades, in 1997 and again in February 2003.
Since the February 2003 release of RiskLink* 4.3 and RiskBrowser* 3.2, the model's mitigation measures have been further expanded to include a greater number of options addressing the Florida law, which requires residential insurers to provide credits for certain construction characteristics that improve structural performance.
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