Aon plc, a leading global professional services firm, announced that its updated Florida hurricane model has been certified by the Florida Commission on Hurricane Loss Projection Methodology (FCHLPM) for ratemaking in the state.
Developed by Aon’s Impact Forecasting team, the model update incorporates the latest research and technology in order to offer insurers a comprehensive view of risk for ratemaking in Florida. The Florida model approval follows the certification last November of Impact Forecasting’s U.S. flood model by the FCHLPM. These new models are part of a broader suite of solutions to support real-time loss forecasting, various accumulation scenarios and climate risk assessment projects. The Florida hurricane model will be released within Impact Forecasting’s ELEMENTS 18.1 platform.
David Colbus, regulatory compliance lead at Aon’s Impact Forecasting, said: “This certification highlights our continued innovation in the modelling space, and our drive to gain a better understanding of natural perils. The updated Florida hurricane model is an example of a collaborative effort within our firm that has resulted in a leading solution to quantify and manage risk, ultimately helping our clients to make better business decisions.”
By utilizing the latest HURDAT2 historical hurricane records and sea-surface temperature data – and integrating insights into regional vulnerability, wind mitigation measures and secondary building characteristics on individual risks – insurers can gain a more comprehensive view of risk and its associated uncertainties.
The model update also features an event set that calculates wind hazard during the entire lifecycle of each simulated hurricane, allowing for variations in hurricane intensity that are associated with varying ocean temperatures. The model’s vulnerability component has been validated using extensive claims data from recent hurricane seasons and reflects variations in building code requirements and compliance practices.
Insurers can navigate potential volatility and increase both their business resilience and their understanding of loss drivers while managing unique portfolios, transferring risk effectively and optimizing capital. Aon now offers clients full transparency to the assumptions, data and other inputs which underlie the Impact Forecasting Florida hurricane model.
Radovan Drinka, model development lead for U.S. hurricanes at Aon’s Impact Forecasting, said: “As part of this update, we improved the underlying statistical framework in the area of claims and vulnerability, which has led to a more accurate sampling of storm losses. Meanwhile, through propriety and academic research, we bring clarity and confidence to hurricane analysis in order to help our clients reduce volatility across their portfolios and build business resilience.”
