The Florida Public Hurricane Model is now available on the Office of Insurance Regulation’s website according to Insurance Commissioner Kevin McCarty. Statewide data showing aggregate results of insurance company filings can now be viewed.
The FPHM was created to provide the ability to accurately calculate hurricane risk and project catastrophic losses. The office unveiled the FPHM last fall and the initial results have been exceptionally accurate.
“We have experienced two years of incredible hurricane activity and experts predict many more. Unfortunately property insurance rates are reflecting this trend,” said McCarty. “If Floridians are going to be charged more for their insurance then we must make the rate setting process as transparent as possible. This model does that.”
The FPHM is the culmination of several years of collaboration between the Office and a team of academicians headed by Dr. Shahid Hamid, director of Florida International University’s Hurricane Research Center. The 2001 Florida Legislature initiated funding for the project.
The Public Hurricane Model’s trial run was very successful. The FPHM estimated $7 billion in hurricane losses for Hurricane Wilma in 2005, which was only a 2 percent variance from the actual losses of $6.9 billion. Private hurricane models predicted losses ranging between $2 billion and $12 billion. The FPHM cost $2.7 million whereas private models reportedly cost between $6 and $10 million.
Currently the FPHM is used for personal residential insurance rate filings. However, the Office received funding from the 2006 Legislature to expand the model’s capability to be used for commercial residential rate filings which include condominium associations and apartment buildings.
Presently there are a number of pending personal residential rate filings that will be analyzed by the FPHM and the aggregate results will be available when the Office takes final action on those filings. To view the results of filings the Office has taken final action on go to Office’s website, Forms and Rates Search Page at http://www.fldfs.com/edms/ and select “Public Hurricane Model” in the keyword list to view statewide average information on insurance company filings.
Source: Florida Office of Insurance Regulation
Was this article valuable?
Here are more articles you may enjoy.