KCC US Hurricane Model Version 4.0 Certified by the Florida Commission on Hurricane Loss Projection Methodology
Boston, MA – July 19, 2023
Karen Clark & Company (KCC) is pleased to announce that the KCC US Hurricane Reference Model Version 4.0 has been certified by the Florida Commission on Hurricane Loss Projection Methodology (FCHLPM).
"Version 4.0 of the KCC Hurricane Model includes several enhancements, most importantly the explicit incorporation of the effects of climate change on hurricanes to date,” said Dr. Daniel Ward, KCC Director of Model Development. “KCC scientists conducted a detailed analysis of how warming temperatures have been impacting hurricane intensities since 1900. The results, revealing a shift toward more severe hurricanes, are incorporated into the Hurricane Reference Model used for ratemaking and PML analyses in Florida and other states."
The Version 4.0 model also incorporates re-intensification of hurricanes over the Gulf of Mexico. “Hurricanes that enter the warm Gulf after landfall can regain strength,” Dr. Ward continued. “KCC scientists fine-tuned the model to capture how climate change is altering storm intensities and landfall locations along the Gulf Coast.”
In addition, KCC scientists and engineers carried out comprehensive research on the patterns and causes of Florida’s disproportionately high number of litigated claims. The Version 4.0 model includes an excess litigation factor for single-family homes that accounts for current trends, along with the positive impacts of recent legislative actions in the state.
The updates ensure that KCC is providing insurers with the most accurate information for their pricing, underwriting, and risk management decisions.
"The FCHLPM certification process, as always, was a rigorous examination of the model assumptions and methodologies," said Glen Daraskevich, KCC Senior Vice President. "By meticulous analysis, the KCC team of experts in meteorology, engineering, statistics, actuarial science, and computer science ensures the KCC models stay up to date with the advancing climate and atmospheric data."
Established in 1995, the Florida Commission on Hurricane Loss Projection Methodology (FCHLPM) reviews and audits methodologies for projecting hurricane losses. KCC's US Hurricane Version 4.0 becomes the first certified model to explicitly account for climate change and excess litigation. This achievement underscores KCC's leadership in delivering accurate hurricane loss estimates for insurers.
About Karen Clark & Company
Karen Clark & Company (KCC) provides advanced models, innovative software, and comprehensive consulting services for deeper insight into climate, weather, and catastrophe risk. KCC professionals are globally recognized experts in catastrophe modeling and risk management who work with company executives to enhance business strategies, competitive advantage, and financial results. KCC models cover tropical cyclones, extratropical cyclones, severe convective storms, winter storms, wildfires, floods, and earthquakes in over 80 countries. For more information, please visit www.karenclarkandco.com.