Florida certifies hurricane risk models

North America

The Florida Commission on Hurricane Loss Projection Methodology has recertified the 2006 US Hurricane models of both EQUECAT and AIR Worldwide Corporation. The Commission was created in 2006 when AIR was the only modeller to be certified. AIR says that recent legislative changes in Florida has led to a much greater degree of model transparency than in previous years. Commission members now have unprecedented access to model assumptions, including trade secrets, for their review and inspection. Similarly, the EQECAT hurricane model first released in 1994, has undergone five major upgrades. EQECAT says that the model is used by primary insurers and reinsurers, as well as financial institutions and intermediaries for portfolio management, pricing, and risk transfer planning. In addition to AIR’s standard store of hurricane information, which it says is based on over 100 years of historical data and over 20 years of research and development, AIR will offer two alternative hurricane data bases for the 2006 hurricane season: a near-term sensitivity catalog, which reflects recent research on the influence of sea surface temperatures on near-term (over five years) hurricane activity and a 2006 seasonal hurricane catalog that accounts for the influence of current climate signals on hurricane activity for the upcoming season.