New RMS API Gives Real-Time, Site-Specific Insights for Risk Selection, Pricing

The solution offers underwriters best-in-class hazard, risk and loss metrics from RMS model science at the location level, ensuring a consistent view of risk from underwriting up to portfolio management.

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RMS (Newark, Calif.), a global risk modeling and analytics firm, has introduced a new solution designed to enable underwriters to access critical information about any location globally, within seconds, in order to gain competitive advantage in risk assessment. The solution, available through an API, will link insurers’ underwriting systems with the most sophisticated hazard, exposure and loss data derived from RMS modeling, according to a vendor statement.

“In today’s soft market, underwriting discipline is vital,” comments Chris Folkman, senior director,model product management, RMS. “Insurers can’t afford to make improper pricing assumptions or inappropriate declinations.”

The best risk selection relies on the most accurate risk intelligence, Folkman stresses. “That’s what this new tool enables in fractions of a second,” he adds. “It provides straightforward insight that is rooted in the world’s best catastrophe risk modeling, at a speed which is fast enough to feed even real-time quoting portals.”

The vendor describes RMS Location Intelligence API as providing a “step-change” in the ability to understand risk at a particular site, and to select and price accordingly, whether that be seismic risk, slope, soil, flood zone or building attributes. That will allow insurers to avoid or cede risks that don’t meet their risk appetite, expand into new territories with confidence, and thus optimize their book of business.

RMS reports that it plans to offer this service across its full range of more than 190 models, reflecting the principal perils in key markets. Currently data is available for:

  • U.S. hurricane: loss costs and risk scoring
  • U.S. earthquake: loss costs and risk scoring
  • European flood (13 countries): hazard data

In late 2017, RMS says that list will be extended to include:

  • High resolution U.S. flood hazard data
  • Enhanced FEMA flood zone data
  • Distance-to-coast, fault, and sinkhole metrics

RMS says it has distilled the multiple terabytes of big data simulations of catastrophic events into pre-compiled loss costs that can be obtained by underwriting teams instantaneously, simply by submitting an address or coordinates, with the option of additional details on key building attributes. That enables unprecedented granularity in risk selection and pricing, the vendor says. The result, according to RMS, is that insurers can gain modeling insights to inform rapid underwriting decisions, during which there is insufficient time to run a catastrophe model.

Single View of Risk

Because the Location Intelligence API draws upon the extensive resources behind RMS’ model science, clients also benefit from a single view of risk across their business; ensuring consistency from underwriting through portfolio management, where decisions are made about capital reserves and reinsurance purchase, the vendor adds.

“For years, RMS has been a leader in portfolio management solutions for catastrophe risk,” adds Folkman. “The wealth of big data generated by a model run can also provide valuable insights at the point of underwriting. We’re now opening up those insights to parts of our clients’ business which don’t rely on frequent use of catastrophe models.”

RMS notes that the cloud-based solution can minimize technical overhead and cost, because Location Intelligence API can seamlessly integrate into existing workflows. It interfaces with underwriting applications, agency portals, or even simple spreadsheets, meaning no additional infrastructure is required, the vendor says.

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