Offshore Platform Model Introduced at London Seminar
Risk Management Solutions (RMS) hosted a seminar in London introducing the new RMS(TM) U.S. Offshore Platform model. Over 90 members of the insurance, reinsurance, and weather brokering industry attended at the London Underwriting Center.
The new Offshore Platform model employs stochastic storm events to generate a robust estimate of the risk posed to an individual platform or a portfolio of platforms, including the probability of exceeding various levels of loss. It uses the same underlying wind hazard model and storm set as the RMS(TM) U.S. Hurricane model, allowing for simultaneous loss calculation for onshore and offshore exposures. Comprehensive exposure data for over 4,000 fixed and floating platforms are included to aid in accurate high-resolution analysis.
"There are currently over 4,000 offshore oil and gas platforms in the Gulf of Mexico, which supply about 25 percent of U.S. energy needs," said Phil LeGrone, lead engineer for the model. "These platforms are worth over $100 billion and sit in open waters, exposed to severe wind and wave forces from hurricanes in the Gulf of Mexico. This exposes their owners, insurers, reinsurers, and investors to potential catastrophe losses."
The RMS Offshore Platform model gives underwriters a complete view of exposure, key events driving losses, and a full range of probabilistic loss estimates, enabling them to better quantify both the frequency and severity of potential hurricane losses. The model also provides the capability to undertake deterministic analysis for historical storms. RMS estimates that Hurricane Andrew (1992) would cause structure and contents damage to offshore platforms in excess of $1.7 billion if it were to occur today; Hurricane Camille (1969) would cause approximately $2.2 billion in damage.