Florida Commission Accepts First Hurricane Models Under New Standards

The Florida Commission on Hurricane Loss Projection Methodology has accepted new loss models from Karen Clark & Co. and Cotality, the first to meet the commission’s latest standards.

KCC’s Version 5.0 incorporates two more years of climate and hurricane data and includes several upgrades, such as secondary building characteristics, new vulnerability functions for appurtenant structures, and updated vulnerability functions for manufactured homes, the firm said Thursday. The update also supports modeling of law and ordinance coverage and roof actual cash value endorsements.

The modeling is designed to help insurance carriers and reinsurers on pricing, underwriting, and risk management decisions, KCC and Cotalitysaid in a statement.

Cotality, formerly known as CoreLogic, said this is the 20th year its model has been accepted by te commission.

The hurricane methodology commission was established in 1995 to review and audit loss models. The commission currently accepts models from seven vendors, including Applied Research Associates, CoreLogic (now Cotality), Florida International University’s public model, Impact Forecasting, KCC, Risk Management Solutions, and Verisk. The certificates for hurricane models accepted under the commission’s 2021 standards are due to expire in November, the commission has indicated.

Under a 2023 state law, property insurers may use an average of two or more computer models approved by the commission. Before that law was enacted, carriers had to choose one of three models. That had led to some complaints, with some in the industry concerned that one model alone did not provide an accurate projection and could skew rate requests.

The hurricane model certifications come nine months after the commission accepted three new flood models: one from Karen Clark, one from Aon’s Impact Forecasting and one being a public model developed by researchers from eight universities.

A bill in the Florida Legislature this year would have moved management of FIU’s modeling program and other functions to Florida State University. It was withdrawn from consideration in May, after winning committee support. The bill was considered part of an effort to make FSU a powerhouse insurance research center.

Topics
Catastrophe
Natural Disasters
Florida
Hurricane