Aon plc announced on November 14, 2024, the launch of its new Florida Flood v3.0 model, which has received certification from the Florida Commission on Hurricane Loss Projection Methodology (FCHLPM). This model is designed to assess flood exposures in Florida and inform re/insurers' rate filings. Florida's extensive coastline and frequent storms make it highly vulnerable to flood events.
Developed by Impact Forecasting, Aon's catastrophe model center of excellence, in collaboration with Fathom, the model quantifies flood risk from tropical and non-tropical weather systems across riverine, surface, and tropical cyclone storm surge sub-perils. David Colbus, regulatory and compliance lead for Impact Forecasting at Aon, stated that the model supports clients in navigating volatility and building resilience in their Florida portfolios. The National Flood Insurance Program's (NFIP) annual average loss in Florida has exceeded $1.1 billion since 2004.
The new model features a stochastic catalog of 92,000 non-tropical cyclone events and 56,000 tropical cyclone events impacting Florida, incorporating structural flood defenses. It allows for separate modeling of various flood sub-perils, with loss outputs available for all combinations. This innovation enhances clarity and confidence around flood exposures, assisting in the pursuit of profitable growth opportunities for insurers.
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