Karen Clark & Company’s (KCC) Flood Model has been certified by the Florida Commission on Hurricane Loss Projection Methodology, making it the first to be accepted by them.
The KCC Flood Model covers coastal flooding from storm surge and inland flooding from extreme rainfall and includes a catalogue of over 100,000 flood intensity footprints created and stored at 30-meter resolution.
The model also includes vulnerability functions, such as building construction, height, first floor elevation, and other secondary characteristics.
It also provides data which indicates the average annual losses from currently insured policies to be over $1 billion in the state of Florida. Insured losses from large events can exceed $30 billion.
Glen Daraskevich, KCC Senior Vice President said: “We are pleased to deliver to the market the first flood model that has been independently reviewed and certified by an external team of experts.
“The Florida Commission review process includes verifying a comprehensive set of standards covering all of the meteorological, hydrological, hydraulic, engineering, and actuarial aspects of the model. Each flood model standard was verified through a rigorous audit process extending over a several month period.”
Joanne Yammine, KCC Director of Actuarial Services commented: “The private market for flood insurance is relatively small, and most of the residential properties that are currently insured are covered by the National Flood Insurance Program (NFIP).
“The KCC Flood Model is the first flood model to be found acceptable for ratemaking in the state of Florida so insurers can start writing flood business with higher confidence and at adequate rates. The KCC model can be used to price and underwrite commercial as well as residential policies.”
Karen Clark, KCC President and CEO said: “Private flood insurance presents a significant growth opportunity for (re)insurers. But in order to write this business, the market requires advanced models that are credible and transparent and can be properly verified.
“KCC is very pleased to be delivering such a model to the industry, further demonstrating our commitment to innovation, scientific advancement, and accurate catastrophe models.”