Re/insurance broker Aon has released its new Impact Forecasting Florida hurricane model, which incorporates the latest research and technology to provide insurers with an additional view of risk when submitting Florida rate filings.
The Florida Commission on Hurricane Loss Projection Methodology has approved the model for ratemaking in the state.
In developing the new model, Aon furthered its commitment and investment in enabling insurers to gain access to alternative views on their risks, without being restricted to just one catastrophe model.
The new model will assist insurers in areas including the identification of risk drivers at the location level to support underwriting and portfolio management strategies and fulfil rate filing requirements for personal and commercial residential risks.
It can also calculate portfolio loss metrics to support capital adequacy studies and rating agency reporting, along with being able to access alternative perspectives to measure catastrophe risk and integrate a bespoke view of risk.
With the model, insurers will have a better understanding the impact of climate change.
They will be able to evaluate a probabilistic view of both the potential insured losses that could arise from hurricanes impacting Florida and the variability in those losses due to future climate scenarios.
Adam Podlaha, Head of Impact Forecasting at Aon, said: “The state of Florida is no stranger to tropical cyclone risk – from 2016 to 2020 alone, the state recorded eight named storm landfalls, including three striking at hurricane intensity.
“These landfalls, plus impacts from non-landfalling storms, have resulted in public and private insured losses in Florida of nearly $40 billion during this period.”
George deMenocal, CEO of U.S. Reinsurance Solutions, added: “Aon actively engages with re/insurers that write Florida business to evaluate alternative views, identify and quantify uncertainty, and customise their view of risk.
“Our new Florida hurricane model will be instrumental in this process and demonstrates our continuing commitment to enhancing the understanding of this peril and helping clients navigate new forms of volatility.”
