Catastrophe risk modelling and analytics firm RMS has announced the release of its U.S Inland Flood High Definition (HD) Model, which accounts for all types of inland floods including those induced by both tropical cyclone and non-tropical cyclone rainfall.
The model is coupled with the RMS North Atlantic Storm Surge Model to provide a more comprehensive view of inland flood risk alongside hurricane-driven coastal flood and wind risk.
Flood is the most frequent and widespread peril in the U.S and has historically been difficult to model and insure due to its relative complexity and the lack of quality data available.
RMS says it has leveraged expertise in flood modelling to bring to market an innovative solution that solves these existing market challenges.
“The market demand for flood insurance is growing, but to date the industry has lacked a tool to enable a rigorous and comprehensive treatment of all sources of flood risk,” said RMS Vice President, Dr. Pete Dailey.
The firm says there is immense opportunity for the insurance industry to grow the U.S Flood market, but it will require leveraging the right tools to understand and accurately assess this risk.
“We are excited that our investment of over 60 man-years of development effort have culminated in a tool that meets this broad market requirement,” added Dailey.
RMS’ HD Inland Flood Model also includes first-of-its-kind capabilities to account for key drivers of flood risk, including employing intelligent modelling techniques to account for key structural attributes such as first floor height and basement characteristics.
“This model is based on state-of-the-art hydrodynamical modeling, and is the first of its kind to be explicitly calibrated to a both depth and flow observations, and validated using flood zone and flood depth information from FEMA, as well as detailed claims data,” stated RMS Vice President, Arno Hilberts.
“This makes [it] unique, and enables our clients to use the model all the way from portfolio-management to the point of underwriting.”
The model also includes the first market-wide solution to account for the presence of all defences that help mitigate flood risk, even in the absence of information being available in public datasets.
“With the NFIP’s recent removal of the non-compete clause for Write-Your-Own carriers, and it’s pending re-authorization in November, we are hopeful that private participation in the flood insurance market will only increase,” concluded RMS Chief Risk Modeling Officer, Dr. Mohsen Rahnama
“As the market evolves, those writing flood insurance will rely on a model that allows them to accurately capture the full range of potential losses from inland and coastal flooding.”