Certifying a flood model for statewide use by the Florida Loss Commission

Aon, a leading global professional services firm, has announced that its recently launched Florida Flood v3.0 model has received formal certification from the Florida Commission on Hurricane Loss Projection Methodology (FCHLPM) for assessing flood exposures in the state of Florida, with a view to inform insurers’ rate filings. 

Built in collaboration with Fathom, the model is an invaluable tool for state insurers looking to make decisions around flood risk with clarity and confidence. The model allows clients to leverage the latest data, analytics and research to quantify flood risk from tropical and non-tropical weather systems across all three flood sub-perils – riverine (fluvial) and surface (pluvial) flooding and tropical cyclone storm surge.

Why is this important?

“Clients should implement a certified model view as soon as possible to ensure their Florida flood strategies meet the requirement in 2025 that any model used to develop residential flood insurance rates be certified by FCHLPM. In this regard, Aon’s new flood model further supports our clients and prospects with rate-making and underwriting, as they seek to navigate volatility and build resilience in their Florida portfolios,” explains David Colbus, Impact Forecasting Regulatory and Compliance Lead. 

The state of Florida is threatened by floods throughout the year, thanks to its extensive coastline and frequent storms. The National Flood Insurance Program’s (NFIP) annual average loss in Florida has exceeded $450 million (adjusted to 2024 dollars) since 2004. In 2023, flood events alone caused $175 million of insured loss according to the NFIP. Prior to Hurricanes Helene and Milton, the first nine months of 2024 saw insured losses exceed $78 million. 

On passing the certification, Fathom’s CEO, Stuart Whitfield says:

“We’re proud to see our flood hazard data supporting Aon’s Florida Flood model, providing re/insurers with intelligence to develop a robust view of flood risk. This initiative underscores the depth of our longstanding collaboration with Aon and highlights our shared commitment to deliver actionable insights that empower better decision-making for re/insurers statewide.”

A model underpinned by transparency

Fathom’s commitment to transparency sees the firm’s data and methodologies published in leading scientific journals, exposing all to academic scrutiny.   

Principal Hydraulic Model Developer, Dr James Savage, comments:

“This is some of the most rigorous scrutiny our models and methods have been placed under. Gaining certification by the Florida Loss Commission is a huge testament to both the Fathom and Aon Impact Forecasting teams and demonstrates the collective drive to deliver not only world leading flood loss models but to do so as openly and transparently as possible.”

“Fathom’s peer-reviewed research papers provided a strong foundation during the audit to demonstrate the high standards of our models and data. Being validated by the Florida Loss Commission is an additional certification of the reliability of our products,” adds Dr Nans Addor, Fathom’s Principal Hydrologist.

The collaboration between Aon and Fathom

The model is a collaboration between Aon and Fathom, developed using Fathom’s high-resolution US Flood Map, hydrological and statistical dependence models, combined with Aon’s tropical cyclone, wind and precipitation models, and hosted on the ELEMENTS loss modeling platform.  The resulting flood model features a stochastic catalog of more than 92,000 non-tropical cyclone events and more than 56,000 tropical cyclone events impacting Florida.  

“We collectively decided to go through this process as we truly believed in the quality of the underlying methods and models and wanted to demonstrate this to anyone who wants to better understand their exposure to flood risk in Florida,” explains Dr James Savage. 

Supporting the insurance industry

Armed with Aon’s Florida Flood model, the state’s insurers can navigate volatility and build resilience in their portfolios, through informed rate-making and underwriting. 

Fathom’s Chief Technical Officer, Dr Niall Quinn, adds: 

“We hope this validation by an independent panel of experts instills confidence in end users who rely on our data within the flood-vulnerable state of Florida.”

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For more information, contact info@fathom.global.