RMS has announced new updates for its models on infectious diseases, climate and cyber risk. Announcing the update at the annual Exceedance conference in early May, the company emphasised the high cost that acute and chronic risks pose in these aforementioned areas.
“Over the last 120 days, every daily action has been critical to flattening the COVID-19 curve and has given us more data to gain insights into outcomes,” said RMS executive VP, models and data Mohsen Rahnama, during a keynote presentation at the conference. “Similarly, climate change has gradually influenced risk over the last 120 years and will for the years to come. In turn, actions taken annually by companies and organisations will be equally critical to both understanding the totality of the risks and impacting outcomes. The effects span all parts of the insurance value chain – from acute risks arising from catastrophic events, such as hurricane landfalls, to chronic risks, such as coastal flooding at high tide.”
During the same presentation, vice president of model development Pete Dailey said that science, data and models have come together to allow higher confidence in the relationship between climate change and insured perils.
“One example is sea level, which we know, based on observations and physics, is rising globally and will continue to rise in the future,” he said.
“In addition, due to COVID-19, extreme weather events that occur this year, such as a major hurricane landfall, will potentially present a number of new challenges for insurers, such as with deployment of adjusters and claims processing, potentially while communities are social distancing. RMS Event Response services provide critical real-time insights for these types of events to help meet these challenges.”
The firm has enhanced the following models:
Infectious diseases model
The model provides a probabilistic view of loss that could result from a range of pandemics, including COVID-19, and epidemics ranging from influenza to the Ebola virus. The model captures the impact of infectious diseases on mortality and morbidity across age groups in 59 countries and considers the use of non-pharmaceutical interventions to slow transmission, RMS said. Recent updates capture improvements in global vaccine production and manufacturing capacity, the availability and effectiveness of pharmaceuticals, country-specific pandemic response, and the underlying health of an insured portfolio. To assess the impact of the COVID-19 outbreak, RMS also offers projections on the number of cases, hospitalisations and deaths by region, and accounts for regional mitigation efforts.
This includes a suite of climate models for hurricane/typhoon, extra-tropical cyclone, flood, severe convective storm, winter storm and wildfire. New advancements offer greater flexibility and computational power, the company said. Clients can analyse their books of business to measure current climate impacts, including consensus trends due to climate change. The Europe Severe Convective Storm High Definition Models are the newest climate models to be added to the global climate model suite.
Enhancements for Cyber Solutions Version 4.0 include exposure data enrichment, new hazard data, a cyber loss module and computation enhancements. RMS is making further enhancements for its next release, Cyber Solutions Version 4.1, along with a new cyber underwriting capability that will be available by September. A