Karen Clark & Company Introduces High Resolution US Storm Surge Model

Boston, MA, January 20, 2015

Karen Clark & Company (KCC) today announced the release of its detailed, high resolution storm surge model for the US. Based on the latest science on storm surge flooding and high resolution elevation data, the model can be used for individual risk underwriting, ratemaking, and portfolio management.

The KCC storm surge model has several important advantages over other available models. Because it’s part of the RiskInsight® open loss modeling platform, the model components are fully transparent. This means clients can see all of the high resolution footprints and easily identify locations vulnerable to storm surge flooding. Insurers can calculate the amount of TIV they have exposed by water depth and apply detailed vulnerability curves to estimate losses.

Insurers can estimate their portfolio losses with and without storm surge, for any leakage assumption, and for storm surge separately. Average annual losses can be accessed for individual properties via web services hosted by KCC or client companies.

"We're very pleased to release this new model so our clients can capitalize on opportunities for writing flood insurance in Florida and elsewhere," said Karen Clark, CEO, KCC. "Because of the transparency RiskInsight provides, our clients can have confidence in their underwriting and portfolio decisions for this highly localized peril."

Along with enabling insurers to estimate their losses from storm surge, the model produces the 100 and 250 year flood zones along the coast. Via a KCC or client-hosted web service, the locations of individual policies can be tested to see if they're in or out of the flood zones before the policies are written. This enables insurers to closely monitor and control their flood loss potential.

"It is important for us to have the most credible and robust underwriting information to effectively grow our business," said Locke Burt, President of Security First Insurance Company. "Whether we’re looking to gain market share or offer new products, the transparency and flexibility of RiskInsight have been critical to providing the insight required to make effective decisions."

The RiskInsight storm surge Reference Model accounts for all of the influences on coastal flooding, including storm intensity, radius of maximum winds, coastal bathymetry, and the presence of inlets or bays. Knowledge of terrain and topography features along with high resolution elevation data enables the model to estimate the water heights at specific inland locations. The model also accounts for surge mitigation devices such as sea walls.

"We've spent years developing the storm surge capabilities in RiskInsight, but what’s more important to our clients is that we’ve spent the past several months reviewing and validating every storm surge footprint in the model," said Glen Daraskevich, Senior Vice President, KCC. "This exhaustive validation process means our clients can be sure they won't get anomalous numbers when they start using the model output. Because we let our clients see all of the components they gain further confidence in the model and in their risk management decisions, along with significant competitive advantage over companies using the more traditional "black box" models."

The RiskInsight model will be presented to the Florida Commission on Hurricane Loss Projection Methodology later this month. "The Commission is investigating flood model standards over the upcoming months, and I'm very pleased to again be engaging with Commission members to discuss the new, open loss modeling platforms," said Ms. Clark.