Catastrophe risk modelling specialists RMS have launched version 18 of their risk model suite, brining with it a raft of additions and expansions, particularly in the Asia Pacific region where new perils have been added including a focus on flood risks.
V18 is the latest incarnation of RMS’ catastrophe risk modelling and management software and represents the biggest update to the risk model suite for some time, as it continues to provide a platform that assists insurance and reinsurance capital providers in taking underwriting decisions and managing their risks.
Among the updates there is a distinct focus on improving risk model coverage for Asia Pacific, with new perils covered and a focus on flood risks, which the company notes is a leading cause of insured loss in countries like India.
V18 sees RMS introducing new peril models for India Flood, Philippines Typhoon and Flood, and South Korea Earthquake.
These will complement the existing earthquake and typhoon models in these key Asian markets, offering a more holistic, market-focused solution.
There are also updates to the Australia Earthquake, Australia Cyclone and India Earthquake risk models.
The new India Flood risk model covers the whole country and includes tropical cyclone, and pluvial and fluvial flooding. RMS hailed the release as the first fully probabilistic flood model for the Indian insurance market.
The Philippines typhoon and flood risk model offers the ability to model and analyse wind, storm surge and inland flood considering both tropical cyclone and non-cyclonic rain.
Another new addition is Post Event Loss Amplification (PLA), which allows the impact of claims inflation, economic demand surge to be modelled as well, has been added to all new and updated models.
The updates continue beyond Asia Pacific, with an expansion to the North Atlantic Hurricane model to cover hurricanes in the East Pacific basin as well. This is an important update, allowing storms to be modelled on both sides of Mexico and north America.
There are also storm surge updates in the U.S. and vulnerability updates across the U.S. and the Caribbean, important after last year’s storms. Additionally, RMS’ high-fidelity modeling tool, RiskAssessor, is being expanded to allow for more accurate hurricane wind risk assessments in all regions covered by the North Atlantic Hurricane models.
Finally, RMS has also expanded its Marine Cargo and Specie, Builders Risk, Industrial Facilities and Terrorism capabilities, as it continues to offer specialty lines risk modelling as well as catastrophe lines. There have also been updates to the Industry Exposure Databases and Industry Loss Curves in peril regions impacted by the changes in V18.
Mohsen Rahnama, Chief Risk Modeling Officer, RMS, commented on the release of V18, “Asia Pacific has always been important to us. The inclusion of new models for the region, including Philippines Typhoon, India Flood and South Korea Earthquake should help enhance the opportunities for established operators and new entrants to better understand the potential for risk, and for growth, in these important markets. Flooding is an international phenomenon and V18 offers customers a more granular view of this on a more global scale.
“Updates can take many years in development, however, it is timely that the Australia Earthquake and Cyclone updates come just after we opened our Australia office last year. With the release of Version 18 we are confident that we are continuing to deliver the high standard of accurate information and analysis that our clients know and expect from RMS.”
The availability of robust catastrophe and specialty risk models is key to the ILS market and collateralized providers of reinsurance coverage. The new models and updates in RMS V18 could provide further avenues for expansion and growth of the collateralized markets in insurance and reinsurance.