In March of this year, the newly christened Risk Prediction Initiative (RPI) 2.0 hosted a workshop on the medium-term outlook for the frequency of hurricane landfalls in the RMS v11.0 risk model. According to this model, the computed risk for hurricanes over the medium-term (next 5 years) increased more than 100% in some regions, which forces insurance companies to hold more capital. This has direct consequences for Bermuda’s (re)insurance industry.
During the workshop, scientists and model developers engaged in a dialogue that opened up the science and basic assumptions used in the hurricane risk model. In the process, scientists identified limitations of the model and worked together to give users guidance on how to interpret model results accordingly. The result is a document that (re)insurance companies can use as a guide for pricing risk—as well as during regulation processes—that gives them scientific justification for their decisions. Furthermore, future avenues of research were identified during the workshop that will ultimately improve hurricane risk models. RPI2.0 will actively support this process by funding relevant research projects.
To learn more about RPI2.0, including how to become a member organization and the benefits of joining, please contact Dr. Falk Niehörster at email@example.com.