RMS launches model platform updates & new HD Euro SCS risk model

Catastrophe risk modelling specialists RMS have announced the launch of a range of product updates to its Risk Intelligence platform, including a new version of its Risk Modeler tool, updated models, plus new high definition risk models covering the European severe convective storm peril across 17 countries in the region.

With severe convective and thunderstorm events on the continent of Europe a driver of seemingly increasing insurance and reinsurance market losses in recent years, particularly in Germany, the availability of advanced catastrophe risk models covering the peril will be welcome in the traditional and ILS markets.

RMS has launched European Severe Convective Storm (EU SCS) High Definition Models covering risks including tornado, straight-line winds and hail storms.

The new risk models represent 50,000 years of simulation of hail and straight-line wind and tornado risk, RMS said, and include all of the key lines of insurance business in the region, such as automobile and property.

The 17 countries in Europe covered are Austria, Belgium, Czech Republic, Denmark, France, Germany, Italy, Liechtenstein, Luxembourg, the Netherlands, Norway, Poland, Ireland, Slovakia, Sweden, Switzerland, and the United Kingdom. France includes Monaco; Italy includes San Marino and Vatican City.

Between 2013 to 2019, insurance and reinsurance market losses from major and attritional severe convective storms exceeded €12 billion, RMS explained, with extensive impacts seen in auto and property lines.

The new HD models cover localised tornadoes and hailstorms, to large derecho events and being HD these risk models allow for the modeling of important time-based policy conditions, such as hours clauses of varying length, which will help European insurers in their underwriting, portfolio management, and capital adequacy decision-making.

RMS’ model also employs the latest technologies, such as dynamic modeling of automobile movement, to help users understand sensitivity in vehicle vulnerability due to variation in location and time of day.

Mohsen Rahnama, Chief Risk Modeling Officer at RMS commented on the launch, “RMS’ EUSCS HD Models give a pan-European view of convective storm risk, developed using latest scientific research, and complementing the existing RMS Europe Wind & Flood solutions, providing users with a holistic view of climate risk across the domain. It covers the full spectrum of SCS hazards – from localized tornadoes, diverse hailstorms, to large derechos. We use a hybrid modeling approach combining parametric and statistical methods which best capture storm footprints, and their associated frequency and severity, hence enabling the assessment of cross-peril correlations.

“The multi-peril stochastic set includes over 7.5 million events, covering 17 countries, based on 50,000 years of simulations, so that we appropriately capture the spatial and temporal scale of convective storm risk in the European modelling domain. This provides in-depth analytics not only on potential loss magnitudes for insurers’ portfolios, but it also captures the geographic and sub-peril correlations accurately. The model is calibrated using billions of Euro property and automobiles claims data.”

RMS has also released a new version of its Risk Modeler tool, Risk Modeler 2.0.

“Risk Modeler 2.0 provides advanced portfolio and account risk analyses leveraging RMS models and is designed to meet the complex needs of risk analysts and cat modelers,” the company said.

“The latest version of the Risk Modeler product enables real-time risk analytics and unified, high performance execution of RiskLink® models and HD Models.”

Risk Modeler runs on RMS Risk Intelligence, the firms open, modular, unified, cloud platform for advanced modeling and risk analysis.

Risk Modeler 2.0 is a unified modeling and analytics solution, with global risk model coverage in North America, Europe, and Asia, with RiskLink versions 18.0 and 18.1 of core models, RMS’ HD Models and also specialty lines risk models.

RMS has also upgraded other HD risk models, with an updated Europe Inland Flood Model covering 18 river basins and over 8,000 catchments across 15 countries in Europe, an updated Japan Earthquake and Tsunami and New Zealand Earthquake models featuring sub-peril coverage for tsunami, fire-following, liquefaction and landslides, and an updated Japan Typhoon and Flood Model incorporating the most recent events such as Typhoons Jebi and Hagibis.

RMS also added new applications to its RMS Risk Intelligence platform.

These include ExposureIQ, to help portfolio managers gain deeper insights into their underwriting books to help in analysis, diversification and re-balancing their portfolios. Which seems very relevant to insurance-linked securities (ILS) fund managers portfolios, as well as traditional reinsurance. ExposureIQ provides real-time exposure information combined with wind forecasting events and footprints from RMS Event Response to help provide a fast assessment of potential losses before, during and after an event. Exposure IQ will be generally available June 2020.

Newversions of SiteIQ and RMS’ Location Intelligence APIs will promote more rigorous catastrophe peril risk assessment that can be done in seconds, early in the underwriting process.

In addition, TreatyIQ will enable property treaty reinsurance underwriters to achieve greater return on capacity with pricing and portfolio roll-up analytics, the company believes. The Treaty IQ application will be available in preview summer 2020 and will be generally available September 2020.

Cihan Biyikoglu, Executive Vice President, Product, at RMS, commented on the new products, “The significant advancements that the RMS team has made across all our products, HD Models, and especially Risk Modeler have been possible through collaboration with more than 400 RMS customers this past year. The Risk Intelligence unified cloud platform, through its innovative use of the risk data lake, the Risk Data Open Standard (RDOS), unified modeling and IQ applications – securely brings greater scale, capabilities and risk insights to the market. I am also excited about what the future holds in terms of new products and technologies. Further developments of the machine learning and artificial intelligence tools used by RMS will continue to open greater opportunities.”

Karen White, Chief Executive Officer at RMS added, “Risk Intelligence is the world’s first comprehensive global risk platform. The complexity and connectedness of risks continually confront us – we are all experiencing the crisis of COVID-19, along with the persistent crises of climate change, extreme weather and growing cyber threats. Facing all this, our industry needs a modern risk platform that takes advantage of all manner of data, modeling and analytics, in a way that is fast, integrated, and leverages technology in new ways for better insights and outcomes. RMS promised innovation, and with Risk Modeler 2.0 and the IQ applications, we have delivered – with an integrated platform for modeling risk in the cloud at the scale and speed required to take on the future of risk.”