Firm Publishes Catastrophic Risk Map of U.S. Insured Hazards

Risk Management Solutions (RMS), Menlo Park, CA, has released map entitled, "Catastrophic Risk in the United States", which represents the combined relative risk of the four most costly insured hazards in the U.S.: earthquakes, hurricanes, tornadoes, and hailstorms. The firm says the map is the first of its kind that compares risk across perils and geographies, using average annual loss (AAL) as a fully convertible currency of risk, as measured by RMS' market-leading RiskLink catastrophe modeling technology.

The map includes a "Risk Thermometer", which provides a relative measure of AAL for 26 U.S. cities. Risk to a city is determined by weighting each of the ZIP Codes within the city by its residential value. The scale on the Risk Thermometer displays values from 0 to 500, representing the annualized dollar loss ("technical premium") for a representative dwelling with a value of $100,000. A value of $100 defines a city with an average AAL ratio of 0.1%, or "one dollar per thousand."

Fourteen of the nation's most significant historical catastrophes are also mapped.

Each event is identified by its magnitude or intensity, estimated insured losses, and its "footprint" of damage. Insured losses reflect the estimated consequences if these events were to occur again today, accounting for the current urbanization patterns, building stock and values, and insurance practices.

"The evaluation of combined risk in the United States is an extraordinarily complex process, given the unique nature of individual hazards and the broad variations in construction and insurance practices nationwide," said Hemant Shah, president of RMS. "With its focus on catastrophes through the lens of AAL analysis, this map offers a fresh perspective on comparative risk."

This poster-sized map won "Best of Show" at the Bay Area Automated Mapping Association's 1999 geography poster contest held last month, and was recognized for excellence in map artistry, cartography, educative mapping, and map analysis.