Karen Clark & Company (KCC) has released Version 5.0 of its US Severe Convective Storm (SCS) Model, incorporating a range of advancements aimed at further strengthening the firm’s approach to quantifying losses from one of the weather perils driving a significant share of insured property losses.
“The world is getting more complex, the climate is changing, and we’re learning faster than ever with AI. If models—particularly for the frequency perils—are even a few years old, they’re already out of date,” KCC explained.
With this in mind, the firm said its scientists update the SCS model annually to ensure (re)insurers stay current with trends and rapidly advancing knowledge.
KCC continued, “Unlike traditional modelling approaches that rely heavily on historical storm reports, the KCC SCS Model is built on high-resolution, AI-informed 4D atmospheric modelling to accurately represent the physical processes that drive hail, tornado, and straight-line wind losses.
“The KCC SCS Model Version 5.0 includes refined modelling techniques for severe tornado outbreaks, as well as refined tornado and wind intensities along the Southeast coast. KCC tornado CEs are ideally suited to estimate the potential impacts of tornado outbreaks on large commercial and industrial facilities, including hyperscale data centres.”
The firm added that the updated model includes fine-tuned vulnerability functions for manufactured homes, updated hail vulnerability functions for site-built homes based on structure age, and refined roof age credits and debits.
KCC noted that because its SCS modelling technology has been extensively validated against tens of billions of dollars in insurer claims data, loss estimates are not expected to change abruptly with model updates but are instead fine-tuned by geography and sub-peril.
Karen Clark, KCC CEO, commented, “The KCC SCS model has become the gold standard for the industry—providing the accuracy and stability that reinsurers and ILS investors require to confidently price and deploy capacity for this peril.
“Version 5.0 reflects ongoing investments in atmospheric science, engineering, AI, and actual claims-based verification to continually refine the representation of severe convective storm risk.”
