Aon introduces new Florida flood risk management model

Aon has announced its new Florida Flood v3.0 model received certification from the Florida Commission on Hurricane Loss Projection Methodology (FCHLPM). The new model assesses flood exposures in the state to inform re/insurers’ rate filings.

Developed by Impact Forecasting – Aon’s catastrophe model centre of excellence – in collaboration with global flood and climate risk modelling firm, Fathom, the Florida Flood v3.0 model allows clients to leverage the latest data, analytics and research to quantify flood risk from tropical and non-tropical weather systems across all three flood sub-perils – specifically, riverine (fluvial) and surface (pluvial) flooding, as well as tropical cyclone storm surge.

Aon said that with Florida’s extensive coastline and frequent storms, the state is threatened by floods throughout the year. According to data from Aon’s Catastrophe Insight, the National Flood Insurance Program’s (NFIP) annual average loss in Florida has exceeded $1.1 billion since 2004. In 2022 alone, Hurricane Ian drove NFIP payouts beyond $5.1 billion on a price-inflated basis.

The Florida Flood v3.0 model is available in Impact Forecasting’s ELEMENTS 18 catastrophe modelling suite – an open, multi-vendor modelling platform, customizable to align with a client’s own view of risk.

Data-led features of the new model include:

High-resolution hazard footprints;

Annual average loss and probable maximum loss estimates, informed by customized portfolio and geographic attributes;

First-floor building height calculations based on high-resolution terrain data, building code and flood inundation depths for all modelled locations;

A shared stochastic and historical catalogue with the Atlantic Tropical Cyclone – Wind (FCHLPM) Model v2.0 and the U.S. Flood Model v3.0.

The innovative new flood model features a stochastic catalogue of 92,000 non-tropical cyclone events and 56,000 tropical cyclone events impacting Florida, and incorporates structural flood defences derived from federal, state and local data sources. It also allows for separate modelling of pluvial, fluvial and storm surge sub-perils, with loss outputs available for all sub-peril combinations.

David Colbus, regulatory and compliance lead for Impact Forecasting at Aon, said: “Aon’s new flood model supports our clients with rate-making and underwriting as they seek to navigate volatility and build resilience in their Florida portfolios. As we continue to evolve our modelling suite and innovate on behalf of clients, we enhance clarity and confidence around flood exposures and assist the pursuit of profitable growth opportunities – which requires the accurate assessment and pricing of risk.”

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