Risk Management Solutions, Inc. (RMS) specializes in developing probabilistic models of catastrophes. These catastrophe (CAT) models are developed using detailed databases of highly localized variations in hazard characteristics, as well as databases capturing property inventory, building stock and insurance exposures. The Industrial Facilities Model (IFM) is calibrated and adjusted using insured loss data from industrial underwriters as well as engineering damage data from recent hurricane and earthquake events. This detailed study provides an understanding of the vulnerability of critical components of industrial facilities and the high proportion of value associated with contents (machinery, equipment, and inventory), a feature that is exclusive to industrial facilities. This model includes a comprehensive set of industrial facility types and a wide range of construction classes.
The model also contemplates business interruption and considers the impact of building, machinery and equipment damage as well as expected modes of component failure. Business interruption downtime values are calibrated using data on operational disruption following past hurricanes, including paid business interruption claims.
All of the required model inputs, known as Primary and Secondary Modifiers, are developed in this manner. The Primary Modifiers include site geographic location and use (i.e., occupancy type) details. The Secondary Modifiers include site specific construction and occupancy features.
The continued analysis and calibration leads to updated versions of the modeling software. The upcoming Version 11.0 (v11.0) of the RMS Atlantic Basin Hurricane Model includes several changes to the Secondary Modifiers. A brief description is as follows:
RMS v9.0/10.0 Secondary Modifiers
V11.0 Secondary Modifiers
Roof Framing Type
Roof Age / Condition
Mech./Elec. Equipment – Roof
Roof Equipment Hurricane Bracing
Commercial Appurtenant Structures
Residential Appurtenant Structures
Wind Resistance – Windows
Wind Resistance – Doors
Roof Sheathing Attachment
Roof Sheathing Attachment
Mech./Elec. Equipment – Side of Building
Mech./Elec. Equipment – Ground Level
Ground Level Equipment
Flashing and Coping Quality
Contents Vulnerability due to Wind
Contents Vulnerability due to Water
If an IFM is coded:
IFM Structure Condition
Mech./Elec. Equipment – Ground Level
IFM Outdoor Machinery/Equipment Bracing
IFM Vertical Exposure Distribution
IFM Site Hazard
Several Secondary Modifiers have been retired, combined or revised. In addition, a few new Secondary Modifiers were created. Most modifiers are being renamed for clarity. For most modifiers, new input options are being added or existing options are being clarified.
A brief description of each Secondary Modifier is provided below:
Construction Quality: has 10 possible entries describing the overall construction quality/design/condition
Roof Covering: has 11 possible entries describing the type of roof covering including shingles (ordinary and those rated for high winds), wood shakes, concrete/clay tiles, membrane roofs (with and without gutters), metal sheathing (including lap seam and standing seam systems)
Roof Age / Condition: has five possible entries describing the age of the roof with an option for “Obvious signs of deterioration or distress”
Roof Geometry: has nine possible entries describing the various roof geometry types including flat roofs, hip and gable roofs of varying slopes. The previous roof parapet Secondary Modifier has been combined into this Modifier for flat roofs.
Roof Anchor: has six possible entries describing the type of anchorage for wood framed roofs
Roof Equipment Hurricane Bracing: has three possible entries describing the type of anchorage/securement of rooftop equipment
Commercial Appurtenant Structures: has three possible entries describing the amount of exterior signage and ornamentation
Residential Appurtenant Structures: has five possible entries describing the types of structures that are typically at residential locations/complexes (i.e., fences/carports, screen enclosures/lanai)
Opening Protection: has 10 possible entries describing the protection of building windows and doors from windborne debris (small, large and medium missiles)
Cladding Type: has nine possible entries describing the type of wall cladding and whether it is designed for impact
Roof Sheathing Attachment: has seven possible entries describing the type of wood roof sheathing securement (i.e., nail type)
Frame-Foundation Connection: has three possible entries indicating if the frame-foundation connection is bolted or not
Basement: has four possible entries describing if the basement (if provided) is protected against flooding
Ground Level Equipment: has four possible entries describing if ground level equipment (if provided) is braced/protected against wind damage
Percent Complete: this is actually retired as a secondary modifier, but the percent complete figure is aimed at buildings under construction. If the field is left blank, the default value is 100%.
Year Upgrade: this field should be populated (by entering the year of the associated upgrade) for a property that underwent a major upgrade to bring it up to current building code standards or to significantly reduce hurricane risk.
Flashing and Coping Quality: has three possible entries describing the compliance of the flashing/coping quality and securement. (Risk Logic Note: This is a welcomed addition to the Secondary Modifiers since perimeter flashing is arguably the most important feature of a wind resistant roof. If flashing fails, a sizable amount of roof covering will likely be lost even if the roof covering is properly secured.)
Content Grade: has four possible entries describing the vulnerability of the facility contents to wind and water damage with appropriate examples for each entry/rating
BI Preparedness: has four possible entries describing the preparedness (Unknown, Poor, Average, Good) of the site to resume production after a windstorm.
BI Redundancy: has four possible entries describing the redundancy (Unknown, Minimal, Average, Extensive) of equipment, operations, production lines, etc. at a given site
If the occupancy is coded for a location is IFM, then certain modifiers will be mapped differently / to a new modifier. Additional/alternative secondary modifiers for IFM occupancies are as follows:
IFM Structure Condition: has five possible entries describing the overall condition of the structure (Unknown, Poor, Average, Good, Excellent)
IFM Outdoor Machinery/Equipment Bracing: has three possible entries describing the type of quality of securement/bracing of outdoor equipment
IFM Vertical Exposure Distribution: has five possible entries describing the vulnerability (based on percentage of contents at grade level) of a facility to surge flooding. This is a surge only modifier that will not impact wind losses.
IFM Site Hazard: has two possible entries describing the facility’s exposure to windborne debris or other environmental hazards. This is a wind only modifier that will not impact surge losses.
In most cases, the Secondary Modifiers for a given site must be ascertained during a site visit or survey. Choosing the correct option for each modifier can be tricky and confusing. If the wrong option is selected, this could have a significant effect on the modeling results, possibly misrepresenting the true CAT exposure for a given site.
Risk Logic engineers are well trained with regard to RMS Hurricane and Earthquake modeling and the required inputs. Our engineers can obtain the Primary and Secondary Modifiers for a given facility and provide them in spreadsheet format for modeling by your firm/broker. We can also have RMS modeling performed for brokers/firms who do not have a contract/license agreement with RMS.