CATASTROPHE MODELS: LEARNING FROM SUPERSTORM SANDY
Although Superstorm Sandy was only a Category 1 hurricane, it made landfall on October 29 as the largest Atlantic hurricane on record. By October 31, catastrophe modeling firms EQECAT and AIR estimated Sandy's insured losses would reach $10 to $15 billion, with RMS only indicating that Sandy's losses would exceed those experienced in 2011 from Hurricane Irene ($4.3 billion)i. Two weeks later, RMS estimated Sandy's insured losses at $20 to $25 billion, which is well-aligned with the Swiss Re estimate of $20 and $25 billion in insured losses.
While the RMS and Swiss Re figures match up, was an event like Sandy considered in the models BEFORE it happened? Lockton's Jeff Tennis addresses this question and gives advice on what can be done to supplement modeled outputs in this report.
Manager Catastrophe Analytics