Catastrophe risk modelling and analytics firm RMS has announced the release of its U.S. Wildfire High Definition (HD) Model for the contiguous United States.
RMS says this new model offers an improvement on the zoning and mapping products currently employed by the re/insurance industry to evaluate wildfire risk.
The company says these methods can fail to account for structural vulnerabilities, are unable to highlight areas susceptible to urban conflagrations and lack probabilistic insight.
“The past five years have demonstrated that the industry needs better ways to manage their wildfire risk comprehensively: for underwriting, for reinsurance purchasing, and for capital management, ” said Chris Folkman, Senior Director of Product Management at RMS.
“After three consecutive seasons with major cat events, it’s clear that wildfire needs to be treated more like a peak peril and less like a simple matter of attritional loss.”
“Wildfire risk has a steep gradient, where different houses in the same neighborhood can have drastically different risk profiles. We’re confident our analytics can equip property writers to price, underwrite, and deploy capital with precision – for any Contiguous U.S. location.”
RMS says its U.S. Wildfire HD Model captures the full impact of a wildfire at high resolution to enable an “unprecedented” understanding of the complex behaviours that characterise fire spread, ember accumulation, and smoke dispersion.
To build the model, RMS partnered with insurers, mitigation experts, and government agencies to ensure that the model’s data, calibration, and scope addresses market gaps.
This includes hundreds of millions of dollars of granular claims data informing the calibration of 13 site-level adjustment features, as well as explicit simulation of ember travel that goes beyond traditional fuel-cased fire techniques.
Anne D. Cope, Ph.D., P.E., Insurance Institute for Business & Home Safety (IBHS) Chief Engineer said, “IBHS is proud to have partnered with RMS in their development of a wildfire solution that includes relevant risk factors like explicit ember modeling while also capturing the latest data from the 2017 and 2018 wildfire seasons.
“The RMS Wildfire model is an important tool towards ensuring that wildfire risk can be confidently understood across the (re)insurance industry.”
Anneliese Jivan, President of The California Fair Access to Insurance Requirements (“FAIR”) Plan added, “With the increasing number of severe wildfires in the U.S., understanding the impact of fire mitigation has never been more important.”
“We’re hopeful that our collaboration with RMS in the development of their wildfire model will enable better industry data collection practices and a more active focus on home fire safety.”