Hemant Shah of RMS discusses how his company came up with its estimate ($20B to $25B) for superstorm Sandy, which has held up well as industry losses have taken shape. Takeaways:
- Sandy was “not a textbook hurricane: [It had] an unusual track; a large, diffuse and transitioning windfield; and a catastrophic storm surge. . .”
- The storm had less than hurricane winds at landfall, but the storm surge was equivalent to a Category 2 storm. Shah credits an overhaul of RMS’s storm-surge model in v11.
- Lots of on-site research to get an idea of how well reality synced with the model.
- Increased precision: “. . .we dynamically modeled the surge street-by-street, distinguishing the flood risk by property based on the elevation and proximity of each building to the water’s edge. Complex interrelationships between extensive power outages, disruption from flooding, widespread coastal property damage and the closure of transportation systems provided additional insights, as did other factors driving potential post-event loss amplification.”