RMS launches Canada wildfire model as industry braces for next black swan event
RMS has launched the RMS Canada Wildfire HD Model as part of its North America Wildfire HD Model Suite on RMS Risk Modeler.
The new Canada model gives customers insights about how individual locations in Canada will be impacted by wildfire events, going beyond traditional fuel-based fire spread simulation techniques. It sheds light on the complex behaviors that characterise fire spread, ember accumulation, fire ignition, and smoke dispersion. It incorporates hundreds of millions of dollars of granular claims data, providing a coast-to-coast, probabilistic wildfire view for Canada’s ten provinces on a simulation-based framework.
RMS said recent disasters have demonstrated the deficiencies with the outdated models that are otherwise available in the market.
The 2016 Fort McMurray Wildfire was the costliest disaster in Canada’s history, with insured losses totaling CA$1.7 billion ($1.36 billion), according to Swiss Re. Five years after this disaster, and in anticipation of the next fast-spreading event, RMS said it was offering the new solution to ensure Canada’s re/insurers, regulators, and wildfire management agencies can actively manage and understand this risk.
Michael Young, vice president of model product development at RMS, said: “Events such as Fort McMurray can threaten insurers with insolvency and point to the need to drill down into the wildfire risk, especially in the wildland-urban interface (WUI). These black-swan, long-tail scenarios require analysis of potential risk accumulations, to provide reassurance to regulators, and must be managed through better risk selection and pricing.”
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