- Aon received approval from the Florida Commission on Hurricane Loss Projection Methodology for its updated Impact Forecasting Florida hurricane model.
- The certification allows insurers to assess risk in Florida better, providing comprehensive views for ratemaking, real-time loss forecasting, accumulation scenarios, and climate change assessments.
- The updated model uses historical hurricane records and sea-surface temperature data, enabling insurers to tailor risk assessment by examining regional vulnerability and the impact of wind mitigation measures.
Aon, a professional services firm, received approval from the Florida Commission on Hurricane Loss Projection Methodology this week for its updated Impact Forecasting Florida hurricane model.
The certification allows for more precise projection insights for insurers to assess risk in Florida, providing insurers with a comprehensive view of risk for ratemaking in Florida, while also facilitating real-time loss forecasting, accumulation scenarios, and climate change assessments.
The updated model leverages the latest historical hurricane records and sea-surface temperature data while also enabling insurers to tailor risk assessment by examining regional vulnerability, the impact of wind mitigation measures, and secondary building characteristics.
“Hurricane Ian caused an economic loss of more than $95 billion and an insured loss of approximately $50-55 billion, said Adam Podlaha, head of Impact Forecasting at Aon. “Our new Florida hurricane model will be instrumental in this process and demonstrates our continued commitment to enhancing the understanding of this peril to help shape better business decisions.”
The Florida Commission on Hurricane Loss Projection Methodology, established in 1995, plays a role in developing residential property insurance rates. To achieve this, the commission reviews hurricane loss models, and insurers can only use certified models for ratemaking.
The methodology’s approval comes concurrent to State Farm stating on Wednesday that it received nearly 59,000 claims and paid out $597 million after Hurricane Ian and Hurricane Nicole made landfall in Florida last year. Moreover, the National Insurance Crime Bureau identified nearly half a million claims related to Hurricane Ian in the months after its impact with 471,581 homeowner claims, 272,465 business claims 272,465, and 151,892 automobile claims.
Initially, meteorology groups, including the National Oceanic and Atmospheric Administration (NOAA), predicted a near-normal hurricane season featuring 12 to 17 named storms with winds of 39 mph or higher. A secondary group, the Sarasota-based Climate Adaptation Center, echoed NOAA’s prediction, forecasting 14 named storms with at least 7 reaching hurricane status and a further 2 or 3 becoming major hurricanes.
However, Colorado State University, a leader in published seasonal storm forecasts, adjusted its 2023 hurricane season forecast last month, now anticipating above-average activity in the Atlantic basin.
The forecast shift is attributed to the presence of record-warm sea surface temperatures in the tropical and subtropical Atlantic regions. However, researchers note that there is more uncertainty than usual due to conflicting signals between the warm Atlantic waters and an expected robust El Niño wind stream, which typically increases wind shear and can disrupt storm formation.
The university now predicts a total of 18 named storms, nine hurricanes, and four major hurricanes, also estimating that the probability of a major hurricane making landfall in the United States is above the long-term average.