CHICAGO, 31 July 2023 - Aon plc (NYSE: AON), a leading global professional services firm, today announced that the update of its Impact Forecasting Florida hurricane model has been certified for ratemaking in the state by the Florida Commission on Hurricane Loss Projection Methodology. The model update incorporates the latest research and technology, offering insurers a comprehensive view of risk for ratemaking in Florida as well as supporting real-time loss forecasting, various accumulation scenarios and climate change assessment projects.
Using the latest version of historical hurricane records (HURDAT2) and sea-surface temperature data, the model allows insurers to customize their view of risk through a detailed examination of regional vulnerability, the impact of wind mitigation measures and secondary building characteristics on individual risks, and uncertainty in an evolving climate. 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, including Law & Ordinance assumptions.
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.
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 Aon’s Florida hurricane model.
Adam Podlaha, head of Impact Forecasting at Aon, said: “Hurricane Ian caused an economic loss of more than $95 billion and an insured loss of approximately $50-55 billion. Aon actively engages with insurers that write Florida business to evaluate and customize their view of risk, support the ratemaking process and quantify uncertainty. Our new Florida hurricane model will be instrumental in this process and demonstrates our continued commitment to enhancing the understanding of this peril to help shape better business decisions.”
For more information about Aon’s Impact Forecasting models, please visit: https://www.aon.com/en/capabilities/reinsurance/catastrophe-model-insight.
Note to Editors:
To develop residential property insurance rates that are “neither excessive nor inadequate,” the Florida Commission on Hurricane Loss Projection Methodology was formed in 1995 to review hurricane loss models. Insurers can only use certified models for ratemaking.
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