How Computer Models Are Playing An Increasingly Important Role In Catastrophe Losses

From Jan. 1 to Oct. 4, 2019, there were 41,074 California wildfires, with 4.4 million acres burned, according to the National Interagency Fire Center. California also sustained its largest fire in state history last year—the Mendocino Complex Fire, which burned 459,123 acres.

Not to be outdone, storm-related losses, including flooding and severe weather in the U.S., caused an estimated $11.8 billion in economic losses, according to Aon Benfield’s report “Global Catastrophe Recap: First Half of 2019.”

Measuring the impact of wind on wildfire, hurricane, and severe-weather losses involves, among other tools, sophisticated software programs and models.

Let’s review wind/computer modeling, explain how it is employed in claims litigation, and provide recommendations on its use.

Due to the potential exposures involved in catastrophe losses today, claims-related wind/computer modeling has dramatically increased in recent years.