Karen Clark & Co. launches WindfieldBuilder™, enhances visibility of hurricane threats

Independent catastrophe risk management and modelling firm Karen Clark & Company (KCC) has launched a new tool which can be licensed as part of its RiskInsight® catastrophe risk management platform. WindfieldBuilder^™ is an advanced scientific tool which allows users to create hurricane tracks, wind speeds and wind fields for analysis purposes.

“We’re very pleased to release this advanced feature in time for the 2013 hurricane season because it’s predicted to be an active year and our clients want to track actual storms and estimate their potential portfolio losses,” said Karen Clark, President and CEO, KCC.

Windfieldbuilder allows users to create realistic windfields for storms of their own creation as well as for actual storms in real-time which can then be imported into RiskInsight, where they can be analysed and have losses estimated for them. Losses can be estimated for individual policies as well as for portfolios of policies and the created wind footprints can also be superimposed on locations and total insured values (TIVs) to enable calculation of exposure aggregations for different wind speed bands.

Karen Clark continued; “WindfieldBuilder gives them the power to create realistic footprints for hurricanes both before and after landfall and to conduct detailed claims analyses using their own loss experience. Because the vulnerability curves in RiskInsight are already visible and customizable, our clients gain competitive advantage by tailoring damage functions to their unique books of business.”

This appears to be an extremely useful tool for anyone managing a portfolio of catastrophe risk which includes hurricane exposure. Being able to create simulations of hurricane windfields and then analyse insured portfolios against those windfields for exposure to losses will be useful to anyone managing a catastrophe bond portfolio, ILS fund or other collateralized reinsurance entity.

“WindfieldBuilder is a powerful tool for the ILS market because it enables fund managers and investors to see clearly how their portfolios will likely respond to hurricanes of different intensities making landfall at various locations along the coast. This advanced tool automatically reads in tracks of actual storms in real time so investors can get a good idea of which of their contracts will be triggered even before the storms make landfall”, Karen Clark told us.

Of course this will also be of interest to insurers and reinsurers as well. The feature that allows you to import hurricane tracks from the National Hurricane Centre will be of particular interest, as will the ability to create a track in real-time as storms approach land and adjust variables to see how it might impact the users insured portfolio.

The tool also aims to provide a way to model the way hurricane winds dissipate, or otherwise, after a storm makes landfall.

“All storms lose energy as they travel over land, but the rate at which that occurs varies widely from storm to storm,” commented Glen Daraskevich, Senior Vice President, KCC. “For example, Hurricane Ike was an outlier in how slowly it dissipated after landfall. WindfieldBuilder shows how historical hurricanes have weakened over land and enables companies to directly test how different filling rates impact their portfolio losses.”

The storm footprints and windfields imported or created are fully transparent to the user. Users will have full visibility and control to adjust filling rates, peak wind speeds, and other sensitive variables such as radius of maximum winds, and will be able to immediately see the impact adjustments make on the storm footprints and estimated losses.

“The transparency of WindfieldBuilder allows for proper external peer review and puts companies at a competitive advantage relative to peers using only the traditional vendor models,” added Ms. Clark. “Rather than relying heavily on event catalogs that may not be credible and that can change significantly from update to update, industry leaders are now using WindfieldBuilder to more effectively leverage their own internal expertise and outside experts of their choosing.”