KCC US Hurricane Reference Model Version 3.0 RiskInsight® 4.10.3.129 Submitted in compliance with the 2019 Standards of the Florida Commission on Hurricane Loss Projection Methodology MAY 3, 2021 Provided to Florida Commission on Hurricane Loss Projection Methodology Copyright ©2021 Karen Clark & Company. All rights reserved. This document may not be reproduced, in whole or part, or transmitted in any form without the express written consent of Karen Clark & Company. Trademarks RiskInsight and WindfieldBuilder are registered trademarks of Karen Clark & Company. KCC US Hurricane Reference Model Version 3.0 – FCHLPM Submission 5/3/2021 4:18 PM Page 2 ©2021 Karen Clark & Company Provided to Florida Commission on Hurricane Loss Projection Methodology KCC US Hurricane Reference Model Version 3.0 – FCHLPM Submission 5/3/2021 4:18 PM Page 3 ©2021 Karen Clark & Company Provided to Florida Commission on Hurricane Loss Projection Methodology Hurricane Model Identification Name of Hurricane Model: KCC US Hurricane Reference Model Hurricane Model Version Identification: 3.0 Hurricane Model Platform Names and Identifications with primary Hurricane Model Platform and Identification RiskInsight® 4.10.3.129 (Primary Platform) Designated: Interim Hurricane Model Update Version Identification: Interim Data Update Designation: Name of Modeling Organization: Karen Clark & Company Street Address: 116 Huntington Avenue City, State, ZIP Code: Boston, MA 02116 Mailing Address, if different from above: Same as Above Contact Person: Glen Daraskevich Phone Number: 617.423.2800 Fax Number: 617.423.2808 E-mail Address: [email protected] Date: May 3, 2021 KCC US Hurricane Reference Model Version 3.0 – FCHLPM Submission 5/3/2021 4:18 PM Page 4 ©2021 Karen Clark & Company Provided to Florida Commission on Hurricane Loss Projection Methodology Description of Trade Secret Information The following items are trade secret information and will be presented to the Commission during the closed meeting and to the Professional Team during the onsite visit: ▪ Form V-3 ▪ Form V-5 ▪ Form A-6 ▪ Additional information regarding the handling of client insurer claims data KCC US Hurricane Reference Model Version 3.0 – FCHLPM Submission 5/3/2021 4:18 PM Page 5 ©2021 Karen Clark & Company Provided to Florida Commission on Hurricane Loss Projection Methodology List of Contents General Standards....................................................................................................................................... 14 G-1 Scope of the Hurricane Model and Its Implementation ............................................................. 14 Disclosures .......................................................................................................................................... 15 G-2 Qualifications of Modeling Organization Personnel and Consultants Engaged in Development of the Hurricane Model ........................................................................................................................... 40 Disclosures .......................................................................................................................................... 40 G-3 Insured Exposure Location .......................................................................................................... 53 Disclosures .......................................................................................................................................... 53 G-4 Independence of Hurricane Model Components ....................................................................... 56 G-5 Editorial Compliance ................................................................................................................... 57 Disclosures .......................................................................................................................................... 57 Meteorological Standards ........................................................................................................................... 58 M-1 Base Hurricane Storm Set ........................................................................................................... 58 Disclosures .......................................................................................................................................... 58 M-2 Hurricane Parameters and Characteristics ................................................................................. 59 Disclosures .......................................................................................................................................... 59 M-3 Hurricane Probability Distributions ............................................................................................. 64 Disclosures .......................................................................................................................................... 64 M-4 Hurricane Windfield Structure .................................................................................................... 67 Disclosures .......................................................................................................................................... 67 M-5 Hurricane Landfall and Over-Land Weakening Methodologies .................................................. 73 Disclosures .......................................................................................................................................... 73 M-6 Logical Relationships of Hurricane Characteristics ..................................................................... 75 Disclosures .......................................................................................................................................... 75 Statistical Standards .................................................................................................................................... 77 S-1 Modeled Results and Goodness-of-Fit ........................................................................................ 77 Disclosures .......................................................................................................................................... 77 S-2 Sensitivity Analysis for Hurricane Model Output ........................................................................ 83 Disclosures .......................................................................................................................................... 83 S-3 Uncertainty Analysis for Hurricane Model Output ..................................................................... 86 Disclosures .......................................................................................................................................... 86 S-4 County Level Aggregation ........................................................................................................... 89 KCC US Hurricane Reference Model Version 3.0 – FCHLPM Submission 5/3/2021 4:18 PM Page 6 ©2021 Karen Clark & Company Provided to Florida Commission on Hurricane Loss Projection Methodology Disclosure ............................................................................................................................................ 89 S-5 Replication of Known Hurricane Losses ...................................................................................... 92 Disclosures .......................................................................................................................................... 92 S-6 Comparison of Projected Hurricane Loss Costs .......................................................................... 95 Disclosures .......................................................................................................................................... 95 Vulnerability Standards ............................................................................................................................... 97 V-1 Derivation of Building Hurricane Vulnerability Functions ........................................................... 97 Disclosures .......................................................................................................................................... 98 V-2 Derivation of Contents Hurricane Vulnerability Functions ....................................................... 107 Disclosures ........................................................................................................................................ 107 V-3 Derivation of Time Element Hurricane Vulnerability Functions ............................................... 110 Disclosures ........................................................................................................................................ 110 V-4 Hurricane Mitigation Measures and Secondary Characteristics ............................................... 113 Disclosures ........................................................................................................................................ 114 Actuarial Standards ................................................................................................................................... 122 A-1 Hurricane Model Input Data and Output Reports .................................................................... 122 Disclosures ........................................................................................................................................ 122 A-2 Hurricane Events Resulting in Modeled Hurricane Losses.......................................................