logo image

Insurance Solutions

Formerly Moody’s RMS

Climate change has been a hot topic in Florida for quite some time. Just last week, President Obama visited the Everglades to discuss the need to address climate change now.

RMS partnered with the Risky Business Initiative to quantify and publicize the economic risks the United States faces from the impacts of a changing climate. In Florida, there is a 1% chance that by 2100, 17% of current Florida property value will be underwater, causing a $20.7 billion increase in annual flooding losses, and $681 billion worth of property loss due to sea level rise.

rms florida climatechange poster

Bob Correll, principal at the Global Environment Technology Foundation leading the Center for Energy and Climate Solutions: Just last week a report commissioned by the G7 was released to the foreign ministers, including Secretary of State John Kerry, titled “A New Climate for Peace: Taking Action on Climate and Fragility Risk.” It outlines seven things we need to worry about as the changing climate becomes more evident, including sea-level rise and coastal degradation.

Brian Soden, atmospheric sciences professor, University of Miami: Sea level rise is the impact of climate change that I’m most worried about. The rate of sea level rise has almost doubled in Miami over the past decade. We are the canary in the coal mine. If you increase sea level by just three feet, which is in the middle of the range of projections, the Everglades would pretty much be gone.

Robert Muir-Wood, chief research officer, RMS: At RMS we attempt to be completely objective about risk. We attempt to take the full scientific understanding and translate it into information about risk and the associated cost. Financial markets are smart. Future risk is already starting to affect the current value of property.

Matthew Nielson, senior director of global governmental and regulatory affairs, RMS: Regulations generally fall into two buckets: curbing emissions so we can temper this problem and thinking about future development and planning to account for future sea level rise.

But what do we do now? There are a lot of things to think about – one is drainage issues. Another is access to fresh water.

Paul Wilson, senior director of model development and lead modeler for the Risky Business Initiative, RMS: It will be interesting to see how things play out – if the response will come as a result of science and gradual sea level rise, or only after a major catastrophe.

Muir-Wood: It’s very hard for communities to take action until they’ve had a disaster. As we’ve seen with Hurricane Katrina and Superstorm Sandy, suddenly there’s all sorts of enlightened thinking about future risk, such as investments in sea defenses. Unfortunately, it often takes a catastrophe to impact on decisions about mitigating risk.

Paul VanderMarck, chief products officer, RMS: You can only build a sea wall so high before it’s not worth living here anymore.

Soden: The biggest question I ask myself is “when do I sell?”

Correll: A year ago the WEF came to us and asked if we would be willing to work with their young global leaders. We had the head of all Shell operations in the Middle East. We had the former head of GE operations in India. They are getting the message. They walked away saying, “we need to rethink our business plans to plan for the future.”

Modeling provides a lot of the underpinnings to make decisions that are outside of the norm. The past is no longer a prologue to the future.

Share:
You May Also Like
February 11, 2016
RMS.com’s New Look

As you may have noticed, RMS.com has a new look and new features. The new site is aimed at delivering the full range of information you need – everything from our products and services, to the latest research and perspectives on industry hot topics, to recent goings-on at RMS. A few things we hope you’ll get from the new RMS.com: A better understanding of our products and services The new RMS.com is designed with you in mind. It features a clearer articulation of RMS products, including models and data by peril, as well as a more robust showcase of our technology and services. Each page includes timely resources such as blog posts, product announcements, and reports, to keep you updated on the most relevant topics. More ways to continue the conversation See something that sparks your imagination? Have questions about one of our products? Our new site makes it easier to contact us and share your views. We hope you find the content to be a compelling catalyst for ongoing conversations about how we can help your business, and drive the industry forward together. A clear, concise view from anywhere The clean design and streamlined text helps you quickly access the information you need from any device. The responsive design delivers a seamless experience whether you’re viewing on your desktop, tablet, or mobile phone. The new RMS.com also complements our client portal, RMS Owl, which provides critical business information and services, from product datasheets to customer support, and more. This is a new beginning: We will continually add content and new functionality as we anticipate your evolving needs. We hope you’ll visit and cruise around the new site and let us know what you think!…

October 17, 2014
Your Excellent Questions On Earthquakes

Today marks the 25th anniversary of the magnitude 6.9 Loma Prieta earthquake which rocked California’s San Francisco Bay Area on October 17, 1989. To commemorate the anniversary and raise awareness about resilience against earthquakes, Dr. Robert Muir-Wood, RMS chief research officer, and Dr. Patricia Grossi, RMS senior director of global earthquake modeling, hosted a Reddit Science AMA (Ask Me Anything). They discussed a number of topics; participants expressed curiosity not just for routine details like the best immediate action in the event of a quake, but also what fault lines are at risk and the finer points of earthquake insurance. Here are just a few of the subjects they tackled in a conversation that generated close to 200 comments by Thursday afternoon – you can also read the entire Reddit thread. Is the Bay Area is better prepared [now] than for the Loma Prieta quake? What role have you (or other scientists) played in planning? Grossi: There’s been a lot of work by PG&E, BART, and other agencies to mitigate earthquake risk – as well as the new span of the Bay Bridge. In addition, the California Earthquake Authority has been encouraging mitigation – and have mitigation incentives if you retrofit your home to withstand earthquake ground shaking. Scientists can help by creating strategic plans or perform cost-benefit analyses for mitigation/retrofit. Is there a link between fracking and earthquakes? Muir-Wood: The term ‘earthquake’ can cover an enormous range of sizes of energy release. Fracking may sometimes trigger small shallow earthquakes or tremors. One day there might be a bigger earthquake nearby and people will argue over whether it was linked to the fracking. The link, however, will remain tenuous. Am I being overcharged for earthquake insurance? I was charged $1,500 a year with a 15 percent deductible. Grossi: Premiums associated with the coverage seem high (as generally double premiums here in California). However, they are based on price-based pricing. The coverage is meant to be a ‘minimum’ coverage – and provide protection for the worst-case scenario. Is Tokyo due for another big earthquake? Muir-Wood: The Big One happened beneath Tokyo in 1923, and before that a similar Big One (not quite on the same fault) occurred in 1703. The 1923 earthquake is not so likely to come around again. However, there was a M7 earthquake in 1855 that occurred right under Tokyo and may be the type of damaging earthquake we can expect. It could do a lot of damage.   Was there anything we missed you wanted to discuss? Please let us know in the comments. …

Cynthia Horiguchi
Cynthia Horiguchi
Senior Marketing Manager, RMS

Cynthia is responsible for content creation and marketing program management as a member of RMS' corporate marketing team. She focuses on creating content to help customers at each stage of the buying cycle, as well as developing marketing programs to highlight innovation at RMS – such as social innovation that helps create a safer and more resilient society. She is based in RMS' Silicon Valley headquarters and has degrees in public relations and political science from the University of Southern California.

cta image

Need Help Managing Your Portfolio?

close button
Overlay Image
Video Title

Thank You

You’ll be contacted by an Moody's RMS specialist shortly.